Trump tariffs bite just as the games industry was getting back on its feet

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It’s been quite the week for news. For starters, the Nintendo Switch 2 has been given a June 5th launch date and $450 price point. Ampere Analysis head of games research Piers-Harding Rolls was bullish on the console, labelling it a “$7 billion to $8bn games content opportunity” over the next two years.

But then the dampener on the excitement: The US Trump administration has imposed tariffs across the world as it looks to balance trade and increase manufacturing at home. Even the penguins on the Heard and McDonald Islands are being hit with them.

Hardware concerns

So what does this all mean for the games industry, which is just starting to come out of a tumultuous few years?

“The biggest impact in the games space will be on hardware, with the Switch 2 being the main immediate concern,” Ampere Analysis senior research manager for games Louise Wooldridge tells PocketGamer.biz. 

“Most gaming devices are at least assembled in China, if not built there. Ironically, Nintendo has progressively shifted assembly out of China to avoid tariffs and into Vietnam which has been hit by a 46% rate – likely an unexpected blow. 

“Now that the price is fixed, it probably cannot be adjusted until 2026, so Nintendo – among others – will be hoping for a swift resolution. It is possible that the pricing of $450 included some foresight from Nintendo, though the extent of the tariffs may not have been accounted for.”

Wooldridge says Nintendo may look for margin upside on content to offset any margin squeeze on hardware, which means more expensive games. The Switch 2 already sees Mario Kart World charged at $80.

“Ampere Games data shows that the US is the biggest console market in all respects, accounting for 45% of global consumer spend on console software and services in 2024,” says Wooldridge.

“Disrupting the biggest market, whether that means fewer devices, more expensive hardware and software, or a greatly accelerated shift to digital content, will obviously have implications for the industry more broadly.”

Mobile market impact

The impact on consoles is more immediately obvious, but how might the tariffs impact mobile? They still affect mobile devices, with Apple notably losing more than $300 billion in market value this week following the tariffs announcement.

That’s because its suppliers and manufacturers are based in countries like China, India and Vietnam. With the tariffs on imports, this could result in price increases for smartphones and tablets. Despite the loss in share price, it still has a market cap of $3 trillion.

The US is also a leading mobile games market. It generated $25.8 billion from player spending in 2024, according to Sensor Tower estimates, more than any other country (not counting third-party Android stores, like the very lucrative marketplaces in China).

“Operational costs for games or games-adjacent companies within the US may also increase,” explains Wooldridge.

“Digital goods still often rely on physical infrastructure, which may become more expensive if components, servers etc. are bought out of China or other markets with high tariffs, and these greater expenses may be passed on to consumers 

“Finally there’s the broader economic impact on things like currency values and inflation, which could affect not just prices but also the spending power of consumers/gamers.”

Just the beginning?

There’s a lot of uncertainty right now. Countries could negotiate new deals with the US in the coming weeks and months to alleviate the impact of the tariffs.

Special exemptions may be carved out – Apple was given Chinese tariff exemptions during the previous Trump administration. There could also be a trade war with certain countries and regions, exacerbating the issues.

Tariffs, and a potential global recession, is the last thing the games industry needed. It’s only just emerged back to small growth after market declines, tens of thousands of layoffs, and numerous company closures. There will still be successful games and businesses in the coming years, but the impending trade wars do not provide a reassuring climate for an industry still reeling.

Oh, and in other news, the deadline to acquire TikTok’s US business is April 5th. AppLovin is now in the fray. A busy news week indeed.