What do the US tariffs mean for video games?
Here’s our handy guide to the tariff situation as it stands, as it might be, and what this could mean for the video game business
2025 has been dominated by one word: tariffs.
The levies imposed, or nearly imposed, by the new US Government, has had a significant impact upon the global economy and businesses in nearly every sector, and that includes video games.
Yet it keeps shifting. New tariffs are proposed, removed, and entirely different ones threatened. Some are on pause, some have gone up, and the impact is complicated and wide-reaching.
So The Game Business had put together a handy guide to the US tariffs, and what they mean for the video game business.
What are the tariffs all about?
The new US administration is starting to impose tariffs on physical goods coming into the US from other countries. That means that companies importing products into the US will have to pay extra fees, and the size of those fees will depend on both the country they’re coming from, and the type of goods.
The US Government hopes that by doing this, it’ll encourage international partners to offer better terms, and boost manufacturing within the US.
Does that impact video games?
Video game consoles, accessories, merchandise and (in some cases) games are manufactured primarily in Asian markets, and in particular in China. These are the markets that have either received, or have been threatened with, the highest tariffs. That means the price of video game goods sold in the US could rise substantially.
PCs and smartphones are also primarily built in these markets (with parts coming from multiple countries). In other words, all products built to play video games may be subjected to some form of tariff.
But it’s not just the game-playing devices. TVs, computer screens, keyboards, headsets, cameras, microphones and other associated products are all subject to increased costs.
How bad are the tariffs?
This is where things get a bit messy. Earlier this year, the US hit China with a 20% tariff, and that has impacted all goods.
On April 2, President Trump proposed a series of tariffs on numerous countries. Vietnam, where some Nintendo Switch consoles are made, was hit with a 46% tariff. Japan, where Nintendo Switch games are manufactured, was hit with a 24% tariff. Other key territories where these products are made include Taiwan, which received a 32% levy, and Cambodia, which was hit with a 49% rate.
This US proposal prompted Nintendo to delay pre-orders for its new Switch 2 console, as this would have a major impact upon the profitability of the console.
A week later on April 9, the day the tariffs were meant to go into effect, President Trump announced a pause on the tariffs for 90 days, giving countries a chance to negotiate and either reduce the tariffs, or remove them entirely - except for China.
In the mean time, every country has been hit with a 10% tariff on goods, while China – which is currently embroiled in a full trade war with the US – has been hit with a huge 125% tariff (in addition to the previously announced 20% levy).
But aren’t PCs and smartphones exempt?
So yes, late in the evening on Friday April 11, a notice from the US Customs and Border Protection (CBP) was posted temporarily making certain electronic devices exempt - including PCs, smartphones and monitors (but not the initial 20% tariff placed on Chinese imports). It’s also made ‘solid-state non-volatile storage devices’ exempt, which means Nintendo Switch cartridges are exempt (for now).
But this is temporarily and actually linked to another investigation into semi-conductors, which has been launched under Section 232 of the Trade Expansion Act. The act enables the President to restrict imports deemed a threat to national security. This would have a direct and serious impact on products like smartphones and PCs.
President Trump has expressly stated that these tariff exemptions are temporary.
Video game consoles, accessories and merchandise are also not exempt.
Why can’t these goods be made in the US?
Well, they can, but there are three key issues. For things like consoles, the US just doesn’t make these products right now. And so to open factories, warehouses, train up staff, develop the expertise and manufacture these products at scale will take a long time (we’re talking years, not months).
Secondly, it just costs more to make things in the US (in terms of labour costs alone), and so making the products in the US will still result in cost increases.
Finally, some of the metals used in manufacturing these products are simply not found in the US. So no matter what, making video game devices will require imports, even if assembly takes place in the US.
What does that mean for video games more broadly?
Ultimately, a drop in games hardware sales will impact video game sales, which will hurt the game development scene globally (including in the US, which is responsible for some of the world’s biggest video games). Investment in new video game properties will likely fall as a result.
And the overall cost of most goods is expected to rise, which means less disposable income per household, and this tends to have the biggest impact on non-essential and luxury goods (such as video games).
So what’s the situation right now?
PCs and smartphones are exempt from most tariffs for now, except a 20% tariff already imposed earlier this year on products made in China. Consoles are subjected to tariffs, and those manufactured in China face significant cost increases, although those manufactured elsewhere (like Vietnam and Taiwan) currently face ‘just’ a 10% tariff.
Extra controllers, merchandise and other accessories face significant price rises.
But it could get a lot worse?
If the initial proposed tariffs come into full effect once the 90-day period ends, and PC and smartphones lose their exemption, we’re looking at costs increasing by hundreds of dollars per unit. And even right now, it’s hard for manufacturers to know how to price their products without knowing what might happen once the deadline is up.
But it could get a lot better?
Indeed, global Governments could agree to a deal. The Entertainment Software Association (ESA), which is the US video game trade body, and others could succeed in convincing the Government to make video game devices exempt from tariffs (something that happened back in 2019).
But there will be some impact even then. Analyst firm Niko Partners reports that it’s possible, even likely, that Chinese consumers will protest the situation and avoid buying US products (even more than they do already).
But this is all just in the US, right?
The tariffs will likely have an impact on exchange rates, consumer confidence and inflation globally, which in turn will impact pricing.
It’s also possible some companies might choose to spread the costs around numerous countries in an effort to protect sales in the US, which is the biggest market for video games in the world.
We shall keep you updated as the story inevitably changes.