Donald Trump’s talk about tariffs has been one of his loudest points during the election, especially the idea of setting high tariffs, like 60%, on goods from China.
Many folks are curious if this means video game consoles and games will become pricier, especially with the buzz around the Switch 2 coming in 2025 and the excitement for Grand Theft Auto VI next year.
There’s no clear answer yet. Some experts doubt the feasibility of such high tariffs. Even if Trump follows through, changes might occur once he assumes office or not at all. To shed light on this, we’ve gathered insights from economists and analysts on how these tariffs might impact the video game industry.
“There’s Going To Be A Lot More Tariffs”
Tariffs are taxes placed on goods as they cross borders. As USC Cornsife tells us, tariffs have been around in the U.S. since the Constitution’s early days. When tariffs happen, the final buyer usually ends up paying more because companies don’t want to lose money and instead increase prices.
Tu Xinquan, from the University of International Business and Economics in Beijing, told The Associated Press that a 60% tariff is unsustainable. If it were to occur, businesses would likely stop trading with the U.S.
Back in Trump’s first presidency, he set tariffs on loads of goods from China, which slowed imports before they picked up again. His idea was to boost American manufacturing, but experts say it didn’t work out. Biden kept those tariffs and added more on items like steel and electric vehicles. Now, Trump’s new plan could be broader, potentially affecting video games. Some think he’ll be more daring in a second term.
“There’s going to be a lot more tariffs, I mean, he’s pretty clear,” said Michael Stumo, CEO of Coalition for a Prosperous America, to the AP. Former White House official Jen Harris expressed concern that Trump’s tariff plans might let companies “jack up prices.”
Recently, on NBC’s Meet The Press, Trump mentioned that his planned import taxes might make things pricier for consumers. “I can’t guarantee anything. I can’t guarantee tomorrow,” he said when asked about potential price hikes.
An Unwelcome Development For Video Games
The gaming world has hit some rough patches lately, with big companies cutting costs through game cancellations, layoffs, and closing studios. New tariffs as the industry tries to bounce back in 2025 could be tough, experts say.
“The potential roll out of US-based tariffs for games-related imports is an unwelcome development for the industry,” said Piers Harding-Rolls from Ampere Analysis. “It’s bad timing due to ongoing cost-cutting, slower market growth, rising R&D budgets, and overexpansion during the pandemic.”
Wedbush Securities analyst Michael Pachter explained to GameSpot that companies like Microsoft and Sony, with U.S. divisions, could avoid tariffs on game downloads, a growing sales segment. For Nintendo, Pachter suggested they could work with a U.S. subsidiary to minimize tariff impact on digital sales.
Physical games, though less prominent, could see price hikes due to import taxes, according to Circana’s Mat Piscatella. This might lead publishers to increase digital game prices to match. “Or the alternative would be to abandon physical. Either way, not great,” Piscatella noted. “Call me old school, but I’m more [of] a free-market guy. Going the isolationist/protectionist route doesn’t generally work out all that well for normal people.”
For new gaming hardware, Pachter suggested companies like Nintendo, Sony, and Microsoft could manufacture in no-tariff countries or the U.S. Analyst David Gibson, who closely follows Nintendo, shared with Yahoo News that Nintendo has already shifted about half of Switch production outside China, to places like Vietnam. However, Switch prices might rise if Trump’s import taxes proceed. Sony produces 70% of PlayStations in China, with the rest made elsewhere, while Microsoft has been moving its manufacturing out of China for years.
Harding-Rolls noted that potential import taxes would impact the home console market most. He estimated the U.S. as the largest console market, comprising 45% of global game spending and 35% of console hardware sales. “Even if there is only a tariff applied to console hardware and accessories, this could disrupt the overall global console market as it would undermine US hardware sales, delay consumer adoption of new consoles, and even reduce consumer spending power on games and games services to offset these increases,” he said.
Without new taxes, Harding-Rolls expects the Switch 2 to debut in Q2 2025 at a higher price than the original. If tariffs arise, Nintendo’s plans could be disrupted, leading to even higher prices for the new console, he mentioned.
“The effects would be devastating for game fans. China would not pay for this: the US consumer would.” — Serkan Toto
“For early adopters, a higher price at launch is unlikely to deter them [from] buying into the platform, but it could have a dampening effect in 2026 and onwards,” Harding-Rolls said. “While there has been some talk of more intensive adoption of cloud gaming services in response to potential hardware price increases, that’s not relevant to upcoming Switch/Switch 2 games made specifically for those platforms. That includes Nintendo’s own Switch/Switch 2 games.”
Serkan Toto from Kantan was straightforward in stating the consequences of new import taxes. “The effects would be devastating for game fans,” he told Digital Trends. “China would not pay for this: the US consumer would.”
$100 games?
According to a report by the Consumer Technology Association (CTA) published in October, new tariffs on tech products could significantly raise prices, potentially increasing video game console costs by up to 40%. For example, this could push a PS5 price from $500 to $800, and game prices from $70 to $112, said Toto. While this is speculative, major retailers like Walmart and Best Buy anticipate significant price hikes if Trump’s tariff plans proceed.
Grand Theft Auto VI, one of the biggest releases of 2025, might see a price increase beyond $70, as development costs for AAA games have risen without corresponding retail price changes. Former PlayStation executive Shawn Layden has repeatedly criticized this pricing issue.
Will Microsoft, Sony, And Nintendo Fight The Tariffs Like They Did In 2019?
Trump’s proposed tariffs might not be enacted as planned or at all. If they proceed, video game products could be exempted. During Trump’s first presidency, the CTA worked with Microsoft, Sony, and Nintendo to challenge proposed tariffs—and succeeded.
“In particular, tariffs on video game consoles would injure consumers, video game developers, retailers and console manufacturers; put thousands of high-value, rewarding US jobs at risk; and stifle innovation in our industry and beyond,” the CTA’s letter from 2019 stated.
On November 27, the CTA issued a statement from CEO Gary Shapiro, describing the trade taxes as a “major inflation-causing tax on Americans and harmful to the US economy.” The CTA estimated that the proposed tariffs would impact over $350 billion worth of U.S. tech imports from China, Mexico, and Canada. Given these concerns, it’s likely the CTA would lobby again to halt the tariffs or secure exemptions, as they did in 2019.
Joost van Dreunen, an adjunct professor at NYU’s School of Business, wrote on his blog that he expects Microsoft, Sony, and Nintendo to once again band together to make a plea for an exemption, just like they successfully did years ago. Harding-Rolls hopes to see this, too.
“During Trump’s previous administration, Microsoft, Sony, and Nintendo got together to successfully argue for an exemption to import tariffs. Let’s hope that the gaming sector is spared once again,” Harding-Rolls said.
GameSpot has reached out to Nintendo, Microsoft, and Sony to find out if these companies plan to band together like they did in 2019 to fight the import taxes. At press time, none have responded.
Tariffs Leading To Changing Consumer Behavior
These proposed tariffs might change how people play games. Van Dreunen suggests that with rising console prices, gamers may turn to “hardware-independent” ways to play. “These tariffs could fast-track the industry’s shift toward cloud gaming, streaming services, and transmedia distribution, marking a classic transition from content innovation to distribution innovation in the pendulum cycle,” he said.
Microsoft is already moving in this direction with Game Pass and cloud gaming, turning any internet screen into an Xbox. Despite selling consoles, Xbox is exploring new methods to reach gamers as the console market stagnates. Van Dreunen believes Sony may also pursue cost-effective distribution options, highlighting the unexpected success of the PlayStation Portal as an example. Reports suggest Sony is developing a dedicated PS5 portable device. “Even including the higher tariffs, [the PlayStation Portal] would remain a reasonable substitute compared to upgrading to the next version of the PlayStation,” he said.
Lots Of Unknowns
Whether Trump’s plans unfold as outlined remains uncertain. Even if he pushes forward, he might face resistance from lawmakers and the public. The AP reported that House Democrats have drafted legislation to strip any president of the power to impose new tariffs unilaterally. This effort is symbolic, given Republican control of the House and Senate under Trump. Suzan DelBene, a Democrat from Washington, stated that no president, Republican or Democrat, should have the authority to “indiscriminately raise costs on the American people through tariffs.” We’ll soon see if Trump takes that step.
