ESA on Trump Tariffs: 'Not Just About Switch 2'

The past 48 hours have been a whirlwind for those following economic news, and even more so for Nintendo enthusiasts. On Wednesday, it was revealed that the Nintendo Switch 2 would be priced at $450 in the U.S., a steep price attributed by analysts to anticipated tariffs, inflation, competition, and rising component costs. However, the situation escalated dramatically when, last night, the Trump Administration unveiled sweeping 10% tariffs on nearly all countries, with significantly higher tariffs imposed on nations like China, the EU, Japan, Vietnam, Canada, Mexico, and others. In a swift response, China announced a 34% retaliatory tariff on all U.S. goods this morning. Amidst this chaos, Nintendo made the decision to postpone pre-orders for the Nintendo Switch 2 in the U.S. as it assesses the impact of these tariffs on its console strategy.

This unprecedented scenario has left analysts, experts, and the public grappling to understand its ramifications. Just 30 minutes before Nintendo's announcement, I had a conversation with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to delve into how these tariffs might affect the gaming industry at large.

The ESA, like many others, is still navigating the uncertain waters these tariffs have stirred. Quinn explained that while tariffs were anticipated due to Trump's previous actions and campaign rhetoric, the full scope of the impact remains unclear. The ESA expects retaliatory measures from affected countries and further U.S. tariffs, but the final outcome is yet to be seen.

Nevertheless, the ESA is certain that these tariffs will negatively impact 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." The ESA's goal is to collaborate with the administration and elected officials to mitigate the damage to U.S. industries, businesses, and gamers.

Quinn emphasized that the impact goes beyond just the cost of gaming systems. She noted, "It's hard to imagine a world where tariffs like these don’t impact pricing." Additionally, consumer spending and, consequently, company revenues will be affected, potentially leading to job losses, reduced investment in research and development, and even influencing the design of future consoles. "The entire consumer ecosystem is connected," she remarked.

In response, the ESA has been proactive, though Quinn admits it's been challenging to start due to the newness of Trump's administration and cabinet. Despite this, the ESA is working to establish connections and engage in discussions with key government figures to highlight the potential impacts on businesses and consumers across the U.S.

Quinn mentioned that the ESA has already joined forces with other trade associations to communicate their concerns to U.S. trade representative Jamieson Greer and is seeking meetings with various legislators and administration members. When asked about the effectiveness of these efforts, Quinn confirmed that conversations are indeed taking place at multiple levels of government, in partnership with other associations, stressing that this issue transcends the video game industry and will affect all consumer products.

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 halt pre-orders for the Nintendo Switch 2 came just minutes after our conversation ended. While the ESA does not comment on individual companies' actions, Quinn reflected on the timing of the Nintendo Switch 2 reveal coinciding with Trump's tariff announcement. She emphasized that the impact of these tariffs extends beyond the Switch to all gaming devices, including other consoles, VR headsets, smartphones, and PCs. "This is going to have an impact... This is company-agnostic, this is an entire industry," she concluded.