Recent discussions have focused on the potential impact of ongoing tariff issues in the United States on the gaming industry, spanning from consoles to accessories and software. While these developments have raised concerns among some about their effects on both consumers and businesses, Strauss Zelnick, CEO of Take-Two Interactive, appeared relatively unfazed by the prospect of tariffs during a recent Q&A session with investors.
During the call, Zelnick addressed a question about his concerns regarding potential price increases for consoles and their broader impact on the gaming ecosystem. This inquiry was prompted by the recent price increase of Xbox Series consoles and the anticipated rise in PlayStation 5 prices. Zelnick acknowledged the complexity and unpredictability of the tariff situation but expressed confidence in Take-Two's fiscal projections for the next ten months:
"Our guide is for the next ten months, essentially, that's the part of the fiscal year that hasn't elapsed yet, and it's very difficult to predict where tariffs will land, given how things have bumped around so far. We feel reasonably confident that our guide wouldn't be meaningfully affected, unless tariffs ran off in a very different direction than we currently expect. In any case, there's already a very substantial install base for all of our target platforms except Nintendo Switch 2, which is pre-launch. So we have, I think, enough insight that we wouldn't be affected by any changes."
Zelnick's confidence stems from the fact that the majority of Take-Two's upcoming game releases will target platforms that most consumers already own. He noted that shifts in sales of new consoles like the Xbox Series, PS5, or the upcoming Nintendo Switch 2 would not significantly impact their business. Furthermore, a significant portion of Take-Two's revenue is derived from digital purchases within ongoing titles such as GTA V, Red Dead Redemption 2, and their mobile gaming ventures, which remain unaffected by tariffs.
However, Zelnick also acknowledged the fluid nature of the tariff situation, echoing sentiments from analysts who have described it as constantly evolving and unpredictable. This uncertainty leaves even a seasoned CEO like Zelnick open to potential changes.
In a pre-call interview, Zelnick discussed Take-Two's quarterly performance, including updates on the development timeline for GTA 6 and its recent delay to next year. Additionally, he shared his optimism about the upcoming release of the Nintendo Switch 2, further highlighting his forward-looking perspective on the company's strategy amidst external economic pressures.
