# **How New Tariffs Might Affect Video Game Pricing and Availability**
The video game sector is facing possible disturbances owing to new tariffs introduced by the Trump administration. These tariffs, targeting imports from Canada, Mexico, and China, may result in higher prices and supply chain complications for both video game software and hardware in the U.S. Experts caution that the repercussions could be especially intense for physical game discs and gaming consoles, potentially speeding up the transition to digital-only gaming.
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## **Tariffs and Their Effects on Physical Game Discs**
A primary concern is the impact on physical game discs. A large portion of these discs is currently produced in Mexico. With a **25% tariff** now applied to imports from Mexico, the expenses involved in manufacturing and distributing physical games in the U.S. are projected to increase significantly.
As noted by Circana analyst **Mat Piscatella**, this situation could lead to a **reduction in the number of physical game releases** within the U.S. He indicates that publishers may choose to **adopt an all-digital approach** rather than incur additional costs. This shift would exacerbate a trend within the industry that has already been decreasing the availability of disc-based games.
> “It wouldn’t shock me to see physical games that are subject to tariffs just not get produced, with publishers switching to an all-digital strategy,” Piscatella expressed on social media.
Moreover, even the prices of digital games might see an impact. Given that publishers frequently keep **price parity** between physical and digital versions, the mounting costs of physical discs could lead to increases in the pricing of digital downloads as well.
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## **Could Game Disc Production Return to the U.S.?**
One possible approach to circumvent tariffs would be relocating game disc production **back to the United States**. Nonetheless, this is improbable due to the **high costs and investments required**. Piscatella mentions that the physical game market has already **diminished by 50% since 2021**, rendering such a move financially impractical. If production were to move back to the U.S., the resulting costs would likely be passed onto consumers as **higher game prices**.
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## **Gaming Hardware: Increased Costs for Consoles and GPUs?**
The tariffs are not exclusively impacting software—gaming hardware is also at stake. **75% of all gaming consoles sold in the U.S. come from China**, and these imports are now subjected to a **20% tariff** (up from 10% last month). This could result in **increased prices for PlayStation, Xbox, and Nintendo consoles**.
Retailers are already experiencing the ramifications. **Newegg**, a prominent electronics retailer, has cited the tariffs as the reason for **escalating prices on Nvidia graphics cards**, including the latest RTX 5080 and 5090 models.
> “Newegg reports the pricing of the RTX 5090 is already being influenced by Trump’s recent trade conflict,” stated Andrew Cunningham.
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## **How Console Manufacturers Are Adjusting**
Not every console maker will face the same degree of impact from the tariffs. Some companies have already begun to **diversify their production locations**:
– **Nintendo**: Almost **half of all Nintendo Switch consoles** are produced outside of China, a strategy that was initiated in response to earlier trade conflict threats in 2019. Consequently, Nintendo may be able to **dodge some of the tariff expenses** by sending non-Chinese-made consoles to the U.S.
– **Microsoft**: The company began **shifting its hardware production away from China** in 2020 due to the COVID-19 pandemic, which may alleviate tariff-related price surges.
– **Sony**: In contrast to its rivals, Sony still relies significantly on **Chinese production for PlayStation consoles**. Analyst David Gibson estimates that **only 30% of PlayStation consoles are produced outside China**, implying that Sony could encounter **higher costs and possible price increases**.
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## **Will Manufacturing Come Back to the U.S.?**
While the Trump administration contends that tariffs will motivate companies to **relocate production back to the U.S.**, industry specialists are doubtful. The **Consumer Technology Association (CTA)** has declared that bringing back game console and hardware production is **not economically viable** due to the scale and intricacies of the supply chain.
> “Fully reshoring technology manufacturing operations back to the United States is simply not practically or economically feasible,” the CTA outlined in an October report.
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## **Is There Potential for a Tariff Exemption for the Game Industry?**
There remains a chance that the gaming industry could obtain an **exemption from the tariffs**. In 2019, **Sony, Microsoft, and Nintendo successfully advocated for an exemption** from a prior set of tariffs on Chinese imports. Recently, Trump has suggested that similar exemptions **could be granted again**.
The **Entertainment Software Association (ESA)** has already started to push back against the tariffs, cautioning that they could **negatively impact the industry**.
