Tariff Impacts on the Gaming Industry

The recently implemented tariffs on Canada, Mexico, and China by the Trump administration are expected to have significant effects on the video game industry in the United States. Analysts warn that these tariffs could lead to price increases and supply issues for both video game software and hardware.

A 25 percent tax on game discs shipped from Mexico, where most physical game discs are produced, could result in a substantial decrease in the number of disc-based games released physically in the US. According to Circana analyst Mat Piscatella, this might prompt publishers to adopt an all-digital strategy, further diminishing the market for physical game discs.

Game makers that continue to produce physical discs are likely to pass the increased costs on to consumers. Moreover, Piscatella suggests that the tariffs could also drive up the prices of downloadable game versions, as publishers typically maintain price parity across different platforms and formats.

Another potential impact of the tariffs is on gaming hardware. With 75 percent of consoles sold in the US being imported from China, which now faces a 20 percent tariff, the cost of consoles and other gaming hardware could rise. This increase in hardware costs, combined with potential price hikes for games, may significantly affect consumer behavior and the overall gaming market.