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

The past 48 hours have been a whirlwind for both economics enthusiasts and Nintendo fans alike. On Wednesday, the gaming world was taken aback when Nintendo announced that the Nintendo Switch 2 would be priced at $450 in the United States. This steep price, analysts suggest, is influenced by anticipated tariffs as well as other factors such as inflation, competition, and the costs of components.

The situation escalated further when, last night, the Trump Administration unveiled a sweeping 10% tariff on goods from virtually every country, with significantly higher tariffs imposed on nations like China, the EU, Japan, Vietnam, Canada, Mexico, and many others. In retaliation, China announced a 34% reciprocal tariff on all U.S. goods this morning. In the midst of this economic turmoil, 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 with its implications. Just 30 minutes before Nintendo's announcement, I spoke with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to delve into the broader effects these tariffs could have on the gaming industry.

The ESA is still navigating the complexities of the situation. Quinn indicated that while they anticipated some form of tariffs due to Trump's previous actions and campaign rhetoric, the exact nature and extent of these tariffs, along with the potential for retaliation from countries like China and further U.S. measures, remain uncertain.

However, the ESA is clear on one point: these tariffs will adversely 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 negative impact extends beyond just the cost of gaming systems. She emphasized that it's "hard to imagine a world where tariffs like these don’t impact pricing." Additionally, consumer spending is likely to be affected, which in turn impacts company revenue, potentially leading to job cuts, reduced investment in research and development, and even influencing the design of future consoles. "The entire consumer ecosystem is connected," she noted.

In response to these developments, the ESA is taking action, though Quinn admitted it's been challenging to get started. With the Trump Administration having been in office for just two months and largely consisting of new appointees, the ESA has had to build new relationships from scratch. Nevertheless, Quinn affirmed their commitment to engaging in dialogue with the right people to mitigate the impact on 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 and is seeking meetings with various legislators and administration officials. When asked if these efforts were making a difference, Quinn confirmed that conversations were indeed taking place at various levels of government, though not yet at the highest echelons. She stressed that this issue transcends the video game industry, affecting a wide range of consumer products.

For concerned consumers, Quinn recommended reaching out to their representatives through letters, calls, emails, or social media to voice their concerns. She believes that the more elected officials and their staff hear from their constituents, the more likely their concerns will be addressed.

Nintendo's decision to halt pre-orders for the Nintendo Switch 2 came shortly after our conversation. While the ESA does not comment on actions taken by individual companies, Quinn highlighted the broader implications of the tariffs on the entire gaming industry, noting that it's not just about the Switch but also affects other gaming devices like VR headsets, smartphones, and PCs. She concluded by emphasizing the industry-wide impact, regardless of the company, stating, "This is going to have an impact on the entire industry."