Physical games and game consoles may become much more expensive in future, following the implementation of US trade tariffs against Mexico, China, and Canada. As recently announced by US President Donald Trump, in the attempt to resurrect the American economy, the country has placed tariffs of 25% on goods imported from Canada and Mexico, and 20% on goods imported from China.
As the ESA recently pointed out, production of video games is intrinsically linked to these regions. Physical games for the United States are largely produced in Mexico, so naturally, a trade tariff on these goods will lead to high prices for manufacturers. Per analyst Mat Piscatella, there’s likely to be a “a sharp downtick in the number of disc-based games that get released physically in the US” as a result of these tariffs – and this will have wide-ranging impacts on games distribution.
In further comments, Piscatella has suggested physical games may be done away with entirely, with producers more likely to switch to an all-digital strategy to save on costs. Given there has already been a push for an all-digital future, with PlayStation even releasing the PS5 in a disc-free format, there are renewed fears this could be one of the final nails in the coffin for physical games, on the whole.
The impact on physical games and consoles
While tariffs introduced only apply within the United States and impacted countries, the games industry remains tied to these regions. Should physical games become more expensive to manufacture and release in the United States, it’s likely costs will be passed onto global consumers.
Read: ESA says US tariffs will cause ‘significant harm’ to games industry
Even if the move encourages producers to move manufacturing of physical games within the United States, that will still mean a higher cost, which will lead to more expensive games.
It’s worth noting the same tariffs may impact console prices. Currently, China produces a vast majority of the world’s technology, as it’s one of the few countries with capacity and expertise to do so. It’s hard to see a world where that changes.
With these tariffs, we can expect companies in the United States to be charged 20% more to import goods from China – and given precedent, it’s unlikely these costs will simply be absorbed. Rather, the onus will be on the consumer to clear the gap in revenue, with consoles prices likely to go up 20% as a result.
With the
As the ESA warned, these tariffs are likely to cause “significant harm” to consumers in the United States, and far beyond. Currently, it appears highly unlikely they’ll have the intended impact – encouraging companies to manufacture within the United States – but consumers will likely suffer, regardless.
