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Increased tariffs on video games will cause ‘significant harm’, says ESA

The Entertainment Software Association claims increased tariffs on video games will ultimately harm the US economy. Check out the arguments made on the topic.

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ESA ask authorities to consult before implementing new tariffs

A few weeks back, US President Donald Trump proposed a 25% tariff on imports from Mexico and Canada. This started a big debate in the gaming community with analysts claiming the decision will hit people with increased prices. Now the Entertainment Software Association (ESA) has also urged the government to consult the private sector beforehand.

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“Tariffs on video game devices and related products would impact Americans of all ages across the country. We urge the administration to consult with the private sector in a transparent process to avoid causing significant harm to everyday Americans and to one of the fastest growing entertainment sectors in the United States,” the ESA said in a statement to Kotaku.

The ESA represents some of the biggest gaming platforms like Microsoft, Sony, and Nintendo. An increase in tariff will impact the sales of the companies.

New tariff may become problematic for the gaming industry

As noted by industry analyst Mat Piscatella an increase in tariff against Mexico can be problematic for physical games with an increase in the price of the discs. An increase in the physical disc will encourage publishers to increase the price of digital purchases to bring it in line.

“Video games are one of the most popular and beloved forms of entertainment for Americans of all ages. Tariffs on video game devices and related products would negatively impact hundreds of millions of Americans and would harm the industry’s significant contributions to the US economy,” ESA further added.

Also Read: Donald Trump’s proposed tariffs on Mexico could spell bad news for video games

Is the new tariff on Mexico and Canada implemented?

At the moment, the proposed tariff has been put on hold, however, if passed, the decision could spell doom for the gaming industry. While Trump reassured it would be harmless for citizens, a majority of the companies will likely shift the increased tax burden onto customers.

Video games are already considered expensive with a $70 price tag. An increase in the price will likely result in widespread criticism and with the current situation of the gaming industry, even lower sales for video games.

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