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ESA on Trump Tariffs: 'More Than Just Switch 2'

May 05,25(1 months ago)

The last 48 hours have been a whirlwind for both economics enthusiasts and Nintendo fans. On Wednesday, we learned that the upcoming Nintendo Switch 2 would retail at a steep $450 in the U.S., a price analysts attribute to anticipated tariffs, inflation, competition, and rising component costs. Then, just last night, the Trump Administration unveiled sweeping 10% tariffs on nearly all countries, with significantly higher tariffs targeting nations like China, the EU, Japan, Vietnam, Canada, Mexico, and others. In a swift response, China announced a 34% reciprocal tariff on all U.S. goods this morning. Amidst this turmoil, Nintendo made the unexpected decision to postpone pre-orders for the Nintendo Switch 2 in the U.S., as they assess the impact of these new tariffs on their console strategy.

This unprecedented situation is affecting everyone, both inside and outside the gaming industry, leaving analysts, experts, and the public grappling to understand its ramifications. Just 30 minutes before Nintendo's announcement, I spoke with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to discuss the broader impact of these tariffs on the gaming industry.

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The ESA, like many, is still piecing together how these developments will unfold. Quinn noted that while tariffs were anticipated due to previous actions by the Trump administration and campaign rhetoric, the scale and specifics were uncertain. They expected potential retaliatory measures from countries like China and the possibility of further U.S. tariffs. However, the full impact remains unclear.

One thing the ESA is confident about is the negative effect these tariffs will have 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," Quinn explained. "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. Our goal is to work with the administration and other elected officials to find a solution that doesn't damage U.S. industries, U.S. business, but also American gamers and families."

The detrimental impact goes beyond just the cost of gaming systems. "It's hard to imagine a world where tariffs like these don't impact pricing," Quinn said. She highlighted that consumer spending would also be affected, leading to reduced company revenue, which in turn could impact jobs, research and development, and the design of future consoles. "The entire consumer ecosystem is connected," she emphasized.

The ESA is taking proactive steps despite the challenges. Quinn acknowledged that the new Trump administration, only two months in office and mostly composed of new appointees, has made it difficult to leverage previous relationships. "But yes, the short answer is we know who the conversations need to be happening with, and we are working on making connections and making sure that they understand that we are eager to work with them to find solutions," she said. The ESA has already joined a coalition of trade associations to voice their concerns to U.S. Trade Representative Jamieson Greer and is seeking further meetings with legislators and administration members.

When asked if their efforts were being heard, Quinn confirmed that discussions are ongoing at various government levels, though not at the very top. "This isn't a video game issue. I represent the video game industry, so I'm very aware of the impact on the video game industry, the potential impact, but it's not just a video game industry issue. This is going to affect all consumer products from food to fashion to electronics," she clarified.

For concerned consumers, Quinn suggested reaching out to their representatives through letters, calls, emails, or social media to express their worries. "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 advised.

Nintendo's decision to pause Nintendo Switch 2 pre-orders came just minutes after our conversation ended. When I followed up with Quinn, she noted that the ESA does not comment on individual company actions. However, regarding the already high pricing of the Nintendo Switch 2, she remarked, "It's been interesting with media coverage around video games and tariffs because of the 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. If we think it's just the Switch, then we aren't taking it seriously. This is going to have an impact. And even American-based companies, they're getting products that need to cross into American borders to make those consoles, to make those games. This is company-agnostic, this is an entire industry. There's going to be an impact on the entire industry."

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