Tag: Tariffs

  • Nintendo Switch 2 Pre-Orders Delayed in Canada to Align with US

    Nintendo Switch 2 Pre-Orders Delayed in Canada to Align with US

    Key Takeaways

    1. Pre-orders for the Nintendo Switch 2 in the US and Canada have been delayed due to tariffs.
    2. Canadian pre-orders, originally set for April 9, have been put on hold indefinitely to align with the US schedule.
    3. The launch date for the Switch 2 is still confirmed for June 5, despite the pre-order delays.
    4. The US pricing is $450 for the console and $500 for the Mario Kart World bundle; Canadian prices are 630 CAD and 700 CAD, respectively.
    5. Despite tariff challenges, the Switch 2 is expected to be the fastest-selling console, with a projected 15 million units to be sold in 2025.

    Nintendo Switch 2 pre-orders in the US have been pushed back due to tariffs, and Canada is now facing a similar situation. The handheld device was supposed to be available for pre-order in Canada starting April 9, the same as in the US, but this has now been put on hold indefinitely. Nintendo hasn’t given any updates on when the Switch 2 will be available for pre-order in either country.

    Pre-Order Timing Adjustments

    As reported by Mobile Syrup, Nintendo stated that pre-orders for the Switch 2 in Canada will not launch on April 9 “to align with the timing of pre-orders to be determined in the U.S.” More details will be shared later, but the launch date of June 5 is still set in stone, for the moment.

    Understanding the Delay Reasons

    The hold-up in pre-orders for the US is due to tariffs, as the company believes it needs to “assess the potential impact of tariffs and evolving market conditions.” Canada’s delay in pre-orders isn’t much of a shock since it is one of the major countries affected by the tariffs that were put in place by President Trump’s administration.

    Pricing and Expectations

    The price for the Nintendo Switch 2 is set at $450 in the US, whereas the Mario Kart World bundle is priced at $500. In Canada, the console costs 630 CAD, and the bundle is at 700 CAD. The company is maintaining the June 5 launch date, suggesting that they anticipate the issues caused by tariffs and pricing concerns to settle by then.

    Even with the tariffs, the Switch 2 is projected to become the fastest-selling console ever, with an estimated 15 million units expected to be sold in 2025, even though sales will only start halfway through the year.

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  • Apple Shifts India-Made iPhones to US Amid Price Hike Fears

    Apple Shifts India-Made iPhones to US Amid Price Hike Fears

    Key Takeaways

    1. Increase in Store Traffic: Apple Stores are experiencing a rise in customer visits due to concerns over potential price hikes from tariffs.

    2. Lack of Corporate Guidance: Apple employees currently lack specific information to reassure customers until the earnings announcement on May 1.

    3. Rerouting Production: Apple is shifting more iPhones manufactured in India to the US market to avoid high tariffs, aiming to produce around 25 million iPhones in India this year.

    4. Potential Cost Increases: The iPhone 16 Pro’s production cost could rise significantly due to tariffs, possibly leading to higher retail prices.

    5. Long-Term Production Shifts: Moving iPhone production to the US is a long-term process that may not result in reduced costs, as Apple adjusts its strategy to mitigate tariff impacts.

    Apple iPhone customers are rushing into stores across the US, asking whether prices will go up following a 34% tariff imposed by the Trump administration on goods coming from China. There’s also a threat of this rate increasing to 50% if China decides to retaliate, which it has.

    Increase in Store Traffic

    Employees at Apple Stores are noticing a significant rise in customer visits, reminiscent of the hustle and bustle seen during the holiday shopping season. Many of these prospective iPhone buyers are concerned about potential price hikes. This surge in inquiries has also led to a boost in sales compared to previous years during the same timeframe.

    Lack of Corporate Guidance

    At the moment, Apple staff don’t have specific guidance on how to reassure anxious customers until the company announces its earnings on May 1. However, Apple is proactively taking steps to mitigate any adverse effects that might arise from the steep tariff increase.

    Rerouting Production

    The company has accumulated several months’ worth of device inventory in the US and is also shifting more iPhones manufactured in India to the US market. These devices incur much lower import tariffs, with Apple planning to produce around 25 million iPhones in India this year.

    If a significant number of these iPhones are sent to the US rather than being sold locally, it could potentially meet roughly half of the American demand for these devices. The high tariff on products from China could increase the iPhone’s Bill of Materials (BOM)—the expense involved in assembling them—by approximately 55%.

    Potential Cost Increases

    For example, the iPhone 16 Pro, which currently has a BOM cost of $550 and is priced at about $917 on Amazon in a Grade A renewed condition, could end up costing Apple over $800 to produce and import due to the newly imposed tariffs.

    To maintain its profit margins, Apple might need to raise the price of the iPhone 16 Pro to match that of a fully loaded 1TB iPhone 16 Pro Max, which may not be appealing to many consumers in the US.

    Long-Term Production Shifts

    Transitioning iPhone production to the US will take time and will not necessarily lower costs. Thus, it appears that Apple is making efforts to adjust its strategy and lessen the impact of tariffs on American consumers as best as it can.

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  • 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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