Tag: Tariffs

  • New Trump Tariffs May Raise Nintendo Switch 2 Prices Further

    New Trump Tariffs May Raise Nintendo Switch 2 Prices Further

    Key Takeaways

    1. Nintendo has moved much of its hardware production to Vietnam to avoid U.S. tariffs on China, but new tariffs now threaten this strategy with a 46% import charge on Vietnamese goods.

    2. Nearly 50% of Nintendo’s hardware is produced in Vietnam, including the Switch and the upcoming Switch 2, which is set to launch on June 5th.

    3. Despite the shift to Vietnam, Nintendo still relies on China for some manufacturing, raising concerns about potential price increases for consumers.

    4. The expected price for the Switch 2 has risen from $400 to $450, with additional costs for games like Mario Kart World, which is priced at $80.

    5. Cambodia could be a potential alternative for production, but it faces its own challenges with steep 49% tariffs, creating uncertainty for future pricing stability.

    Nintendo has shifted a lot of its hardware production to Vietnam to reduce the effects of U.S. tariffs on China. Sadly, President Trump’s new tariffs have introduced a hefty 46% charge on imports from Vietnam. Fans of gaming, especially those who are let down by the Switch 2 price, are now worried about potential price increases in the future.

    Shift to Vietnam

    The Japanese gaming giant started moving its factories to Vietnam back in 2019 as a response to previous tariffs from Trump aimed at China. Current estimates suggest that nearly 50% of Nintendo’s hardware is produced in this Southeast Asian nation. Among these products are the well-known Switch and the upcoming Switch 2 consoles. To counter an ongoing trade conflict, Nintendo sent a significant amount of its new gaming system to the U.S. as early as January.

    Ongoing Dependence on China

    Despite this shift, Nintendo still relies on China for some of its manufacturing, which means there are limits to its strategy. Gamers are left pondering whether the company had foreseen the new Trump tariffs affecting Vietnam. Some leaks regarding the Switch 2 hinted that it would be priced at $400. However, it turns out that the handheld device will actually cost $450, which is more than expected. On top of that, the costs for upgrading with Mario Kart World are surprising many, as it comes with an $80 price tag. Alternatively, consumers can buy a Switch 2 bundle that includes the game for $499.99.

    Future Price Stability

    If Nintendo had properly considered future tariffs, gamers might have seen a more stable price for the Switch 2. It’s also unlikely that Nintendo will make any adjustments before the console launches on June 5th. Nonetheless, it might not be long before buyers feel the effects of these import costs.

    Cambodia appears to be a clear alternative for producing Nintendo’s consoles. The company already has operations in that country. However, Cambodia has recently been slapped with steep 49% tariffs. While consoles were exempt from China tariffs back in 2019, it’s uncertain if gamers can count on another break this time around.

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    New Trump Tariffs May Raise Nintendo Switch 2 Prices Further
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  • Trump Tariffs Could Raise Game Costs and Reduce Disc Production

    Trump Tariffs Could Raise Game Costs and Reduce Disc Production

    Key Takeaways

    1. Analysts warn that tariffs imposed by the Trump administration may lead to a decline in the production of physical game discs, pushing publishers towards digital-only models.
    2. A 25% tariff on imports from Mexico is expected to reduce the availability of physical game discs in the US and potentially raise prices for both physical and digital versions.
    3. The production of game discs is heavily reliant on Mexico, with significant implications for the gaming industry due to the tariffs.
    4. A 20% tariff on consoles imported from China may lead to rising prices, although current inventory may keep prices stable for now.
    5. Spending on physical video game software in the US has been declining since 2021, adding to the challenges faced by physical game production.

    Analysts have raised concerns that the tariffs recently imposed by the Trump administration may negatively affect the production of physical game discs. This change might lead publishers and developers to abandon physical copies altogether. The tariffs, which took effect on March 4, target Canada, Mexico, and China, with Mexico being highlighted as the primary producer of these game discs.

    Impact on Game Production

    Circana analyst Mat Piscatella mentioned on the social media platform Bluesky that while video games represent a tiny fraction of the overall turmoil caused by the Trump tariffs, it wouldn’t be surprising if physical games “just don’t get made” anymore. He suggested that many publishers may lean towards a digital-only model and stop offering physical versions of their games altogether.

    Decline in Discs and Rising Prices

    In January, Piscatella pointed out that a significant portion of physical game disc production takes place in Mexico. With the introduction of a 25% tariff on imports from Mexico to the US, a decrease in the number of disc-based games entering the US market is anticipated. For those games that still offer discs, prices are expected to rise, even for digital editions, to keep price equality. Additionally, while production could shift to the US, it would necessitate considerable investment. However, spending on physical video game software in the US has been declining since 2021.

    Hardware Consequences

    A similar situation is expected for hardware, as around 75% of all consoles sold in the US are imported from China. With a 20% tariff now in place, prices may rise in the future. For now, PC hardware and consoles will likely keep their current prices until the existing inventory from before the tariffs is sold out. Interestingly, in February, Newegg reportedly cited the tariffs as a reason for the increase in prices of Nvidia GeForce RTX 5080 and RTX 5090 GPUs in a post on X, although those posts have since been removed.

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