What a boom: Donald Trump launched a metaphorical nuclear bomb on the global economy on April 2 during his so-called "Liberation Day" speech. Entire industries are now grappling with the fallout. According to the Entertainment Software Association (ESA), the U.S. video game industry could suffer unprecedented consequences.
The video game sector must brace for impact following the announcement of Trump's new tariffs earlier this week. According to Aubrey Quinn, senior vice president of the ESA, these tariffs will significantly disrupt game development, as well as hardware and software production.
Gaming hardware such as dedicated home consoles will experience a particularly big fallout, Quinn said. These devices are primarily manufactured in countries targeted by the tariffs. Even the parts required on the assembly line, which are typically sourced from various local and international markets, could face additional levies, further inflating the final cost of production.
"Any one product that a consumer would buy is likely to be subject to many of the tariffs announced, all compounded on top of one another," Quinn stated. Then there's the issue of retaliation, with many nations and the European Union threatening to respond with their own tariffs. According to the ESA, Trump's so-called Liberation Day may just be the beginning of a long and uncertain road.
Tech companies like Apple and Nintendo attempted to mitigate the impact of the tariffs by relocating manufacturing operations from China to alternative, often cheaper countries like Vietnam. But Trump caught up with them, too, announcing a 46 percent tariff on Vietnamese imports on April 2.
As a result, American consumers can expect to pay around $450 for the upcoming Switch 2 console, while Japanese gamers – unaffected by U.S. tariffs – will pay only $343 for the same device. Even the price of new games for the recently announced console is expected to rise, with Nintendo citing tariffs among several contributing factors.
Quinn also emphasized that bringing manufacturing back to the U.S. – presumably the Trump administration's ultimate goal – won't happen overnight, if at all.
The supply chain is an incredibly complex system, and every company must consider what's best for its consumers, business, and employees. The ESA hopes all parties involved can ultimately reach a solution that doesn't harm the gaming industry or American consumers.
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