The past 48 hours have been a whirlwind for economic news enthusiasts and Nintendo fans alike. On Wednesday, the gaming community was hit with the news that the Nintendo Switch 2 would retail at $450 in the U.S. This steep price point, as analysts say, is influenced by a combination of factors including anticipated tariffs, inflation, competition, and the rising costs of components.
The situation escalated further when, on the previous night, the Trump Administration announced wide-reaching 10% tariffs on nearly every country, with significantly higher tariffs targeting nations like China, the EU, Japan, Vietnam, Canada, Mexico, and others. In a swift response, China announced this morning a 34% reciprocal tariff on all U.S. goods. Amidst this turmoil, Nintendo made the decision to postpone Nintendo Switch 2 pre-orders in the U.S. to assess the potential impact of these tariffs on their console strategy.
This unprecedented series of events has left everyone, from industry insiders to the general public, grappling with the implications. Just 30 minutes before Nintendo's announcement, I spoke with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to delve into how these tariffs might affect the gaming industry at large.
The ESA, like many others, is still piecing together the puzzle of how these tariffs will unfold. Quinn mentioned that they were somewhat prepared for tariffs due to previous actions and discussions by the Trump administration. However, the scale and specifics of the current tariffs, along with expected retaliations and potential future levies, have left much uncertainty.
Despite the ambiguity, the ESA is clear on one point: these tariffs will have a negative impact on the video game industry. "We really are, at this point, just watching and trying not to have knee-jerk reactions, because we don't think that what President Trump announced this week is the end of the story, but what was announced this week and the tariffs as outlined, we do expect these tariffs will have a real and detrimental impact on the industry and the hundreds of millions of Americans who love to play games," Quinn stated. She emphasized the ESA's goal to collaborate with the administration and elected officials to find solutions that protect U.S. industries, businesses, and gamers.
Quinn elaborated that the detrimental impact extends beyond just the cost of gaming systems. "It's hard to imagine a world where tariffs like these don't impact pricing," she noted, pointing out that consumer spending, company revenue, jobs, investment in research and development, and even the design of future consoles could all be affected. "The entire consumer ecosystem is connected," she concluded.
In response to these challenges, the ESA has been proactive, though Quinn admits it has been challenging to get started due to the newness of the Trump administration and its cabinet. They are working to establish connections and ensure that policymakers understand the potential impacts on businesses and consumers within the U.S.
The ESA has already joined a coalition of trade associations to express their concerns to U.S. trade representative Jamieson Greer and is seeking meetings with various legislators and administration members. When asked about the effectiveness of these efforts, Quinn affirmed that conversations are indeed happening at various levels of government, emphasizing that the issue transcends the video game industry and will affect all consumer products.
For concerned consumers, Quinn suggested reaching out to their representatives through letters, calls, emails, or tweets to voice their concerns. "I think the more members of government, elected officials, and their staff who hear that their constituents are concerned, the more likely we are to be heard and to potentially make an impact," she stated.
Shortly after our conversation, Nintendo announced its decision to hold off on Nintendo Switch 2 pre-orders due to the tariffs. While the ESA does not comment on individual company actions, Quinn reflected on the broader impact of the tariffs on the gaming industry. "It's been interesting with media coverage around video games and tariffs because just unfortunate coincidental timing that the Switch [2 reveal] was the same day as President Trump's announcement. There are so many devices we play video games on. There are other consoles, but as I was saying, VR headsets, our smartphones, people who love PC games, if we think it's just the Switch, then we aren't taking it seriously. This is going to have an impact," she said. She further emphasized that these tariffs would affect the entire industry, regardless of the company, as many products need to cross U.S. borders to reach consumers.
