ESA on Trump Tariffs: More Than Just Switch 2 at Stake

The last 48 hours have been a whirlwind for those following economic news and a rollercoaster for Nintendo enthusiasts. On Wednesday, it was revealed that the Nintendo Switch 2 would be priced at a steep $450 in the United States. Analysts attribute this high cost to a mix of factors, including anticipated tariffs, inflation, competition, and rising component costs.

The situation escalated dramatically last night when the Trump Administration announced sweeping 10% tariffs on nearly every country, with significantly higher tariffs imposed on nations such as China, the EU, Japan, Vietnam, Canada, Mexico, and others. In a swift response, China announced a 34% reciprocal tariff on all U.S. goods this morning. Amidst this turmoil, Nintendo made the surprising decision to postpone pre-orders for the Nintendo Switch 2 in the U.S., as they assess the impact of these tariffs on their console plans.

This unprecedented series of events has left both the gaming community and the general public grappling to understand the broader implications. Just 30 minutes before Nintendo's pre-order announcement, I spoke with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to discuss the potential impact of these tariffs on the gaming industry.

The ESA, like many others, is still piecing together how these developments will unfold. Quinn noted that while tariffs were expected due to previous actions and campaign promises by Trump, the specifics and potential retaliatory measures from countries like China add layers of complexity. The ESA anticipates further tariffs and levies from the U.S., but the full picture remains unclear.

However, the ESA is clear on one thing: these tariffs will adversely affect the video game industry. "We really are, at this point, just watching and trying not to have knee-jerk reactions, because we don't think that what President Trump announced this week is the end of the story, but what was announced this week and the tariffs as outlined, we do expect these tariffs will have a real and detrimental impact on the industry and the hundreds of millions of Americans who love to play games," Quinn stated. She emphasized the ESA's commitment to collaborating with the administration and other elected officials to mitigate the damage to U.S. industries, businesses, and gamers.

Quinn highlighted that the impact extends beyond just the pricing of gaming systems. "It's hard to imagine a world where tariffs like these don’t impact pricing," she said. She also pointed out that consumer spending will be affected, leading to reduced company revenues, which in turn could influence job security, R&D investments, and the development of future consoles. "The entire consumer ecosystem is connected," she remarked.

In response to these challenges, the ESA has initiated several actions, though Quinn admitted that progress has been slow. With the Trump Administration only recently reinstated and largely composed of new members, the ESA has had to rebuild connections. "But yes, the short answer is we know who the conversations need to be happening with, and we are working on making connections and making sure that they understand that we are eager to work with them to find solutions," Quinn explained, stressing the importance of public and private sector dialogue to highlight the risks to businesses and consumers within the U.S.

The ESA has already joined forces with other trade associations to express concerns to U.S. Trade Representative Jamieson Greer before the tariffs were announced and is seeking meetings with various legislators and administration members to discuss these issues. When asked about the effectiveness of these efforts, Quinn confirmed that discussions are ongoing with various levels of government, including the White House and the U.S. Trade Representative's office. She emphasized that the issue transcends the video game industry, potentially affecting all consumer products from food to electronics.

For concerned consumers, Quinn suggested reaching out to their representatives through letters, calls, emails, or social media to voice their concerns. "I think the more members of government, elected officials, and their staff who hear that their constituents are concerned, the more likely we are to be heard and to potentially make an impact," she advised.

Nintendo's decision to delay Nintendo Switch 2 pre-orders came shortly after our conversation. While the ESA does not comment on decisions by individual companies, Quinn did reflect on the timing of the Switch 2 announcement coinciding with Trump's tariff announcement. "There are so many devices we play video games on... If we think it's just the Switch, then we aren't taking it seriously. This is going to have an impact," she stated. She emphasized that the impact would be industry-wide, affecting all companies regardless of their origin due to the global nature of product supply chains.