Analysts say new US Tariffs will have massive impact on gaming hardware and physical games

With new tariffs on imports from China, Canada, and Mexico now live, various games industry analysts suggest things may turn bad for gamers. The increased tariff rate will ultimately result in an increase in physical games and gaming hardware/console prices as most of the manufacturing is done across these countries before importing to the US.

The plan here is to have the companies shift to manufacturing in the US, however, Director of Research & Insights at Niko Partners, ‘Daniel Ahmad’ says this will not work for video game consoles. Regardless of the decision, the result will ultimately be an increase in prices for consoles.

“This doesn't work for video game consoles because it's prohibitively expensive and would take too long. Consoles prices would go through the roof. The solution is that video game console manufacturers will (are) shift production to Southeast Asia or India to maintain margins,” Ahmad wrote.

This doesn't work for video game consoles because it's prohibitively expensive and would take too long. Consoles prices would go through the roof.

The solution is that video game console manufacturers will (are) shift production to Southeast Asia or India to maintain margins. https://t.co/BljTW4XfHQ

— Daniel Ahmad (@ZhugeEX) March 4, 2025

Consoles like Nintendo Switch 2 to see price bump

China saw an increase from 10% to 20% and as per reports, 75% of the consoles across the US are imported from China, directly affecting the current prices when the stock runs out. Nintendo recently revealed Switch 2 and fans are worried that the decision may have resulted in increased prices of one the most anticipated gaming consoles.

As Ahmand suggested, companies aren’t likely to simply increase the prices before exploring other options. On the bright side, if manufacturing shifts to India, maybe console prices will finally go down and more people will be willing to opt for PS5 or Xbox. People may even see the Nintendo Switch 2 release in India.

Also Read:As Trump's tariffs goes into effect, Nvidia loses over $200 billion in valuation

Physical games may face extinction

Physical video games are already facing a decline as the digital market rapidly takes over by cutting costs. This 25% increase in tariff for Mexico, where most of these games are imported from will result in one of two things. Either price increases or physical discs are discontinued by the companies.

As per Mat Piscatella, Video Game Industry Analyst at Circana, companies are most likely to go with the latter. “Very small piece of all this, but it wouldn't surprise me to see physical games that would be subject to tariffs simply not get made, with pubs moving to an all digital strategy. What a mess,” he wrote.