ESA on Trump Tariffs: 'More Than Just Switch 2'

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

The situation escalated further when, last night, 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 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 strategy.

This unprecedented scenario has left analysts, experts, and the public grappling to understand its implications. Just 30 minutes before Nintendo's announcement, I had the opportunity to speak with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to discuss the broader impact of these tariffs on the gaming industry.

The ESA, like many others, is still navigating the potential outcomes of these developments. Quinn noted that while tariffs were anticipated due to previous actions and campaign promises by Trump, the exact nature and extent of the retaliation from countries like China, along with potential future U.S. tariffs, remain uncertain.

However, the ESA is clear on one point: these tariffs will negatively affect the video game industry. Quinn stated, "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. And so our goal is to work with the administration, to work with other elected officials to try to find a solution that doesn't damage U.S. industries, U.S. business, but also American gamers and families."

Quinn elaborated that the impact would extend beyond just the pricing of gaming systems. She explained, "It's hard to imagine a world where tariffs like these don’t impact pricing." She also highlighted that consumer spending would be affected, which in turn would influence company revenues, job security, investment in research and development, and even the design of future consoles. "The entire consumer ecosystem is connected," she emphasized.

In response, the ESA is taking action, though Quinn admits it's challenging to get started due to the newness of the Trump administration and its largely new cabinet. Despite these hurdles, the ESA is actively working to establish connections and engage in dialogues with key figures in the administration to mitigate the impact on the industry and consumers.

Quinn mentioned that the ESA had already joined a coalition of trade associations to voice their concerns to U.S. Trade Representative Jamieson Greer before the tariff news broke. They are also seeking meetings with various legislators and administration members to discuss these issues further.

When asked if these efforts were making a difference, Quinn confirmed that conversations are indeed happening at various levels of government, including with members of the administration and the office of the United States Trade Representative. She stressed that this issue transcends the video game industry, affecting all consumer products from food to fashion to electronics.

For concerned consumers, Quinn suggested reaching out to their representatives through letters, calls, emails, or social media to express 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 said.

Nintendo's decision to hold off on Nintendo Switch 2 pre-orders came just minutes after our conversation ended. When asked for further comment, Quinn noted that the ESA does not comment on actions taken by individual companies. However, she reflected on the timing of the Nintendo Switch 2 announcement coinciding with Trump's tariff announcement, emphasizing that the impact of these tariffs would be felt across the entire gaming industry, not just with Nintendo.

"And even American-based companies, they're getting products that need to cross into American borders to make those consoles, to make those games. And so there's going to be a real impact regardless of company. This is company-agnostic, this is an entire industry. There's going to be an impact on the entire industry," Quinn concluded.