Recent tariffs imposed by President Donald Trump on countries such as Mexico, China, and Canada may lead to increased prices for video games and consoles, reduced physical releases, and potential supply shortages, according to analysts in the industry.
Impacts on Physical Game Releases
Most video game discs are currently manufactured in Mexico. The introduction of a 25 percent tariff on these goods means that the cost of game discs is expected to rise, ultimately being passed on to consumers. Circana analyst Mat Piscatella expressed concerns about the future of physical games, suggesting that publishers might opt to abandon physical formats altogether to circumvent tariffs.
Digital Sales Considerations
Even if consumers turn to digital purchases to avoid increased prices, this may not be a viable option. Analysts indicate that publishers could respond to the cost implications of physical games by raising digital prices to match. This could lead to unfavorable conditions for gamers, whether they prefer digital or physical games.
Tariffs Affecting Consoles
The tariffs similarly affect video game consoles. An analysis by Daniel Ahmad from Nike Partners highlighted that approximately 75 percent of consoles are produced in China. The tariffs could result in higher retail prices for consumers in the U.S. and potentially decreased production rates, leading to supply shortages.
Predicted Price Increases
According to previous reports, substantial jumps in console prices are anticipated due to these tariffs. For instance, it’s projected that the price of a Nintendo Switch could rise from $300 to $400, while a PS5 Pro might see an increase from $700 to $1,000. Such price hikes could make already limited supply consoles even more challenging for consumers to acquire.
The evolving situation regarding tariffs poses significant challenges to both the gaming industry and consumers, with potential shifts towards digital formats and increased costs that may shape future market trends.