Mat Piscatella of Circana said this is an unprecedented and “chaotic” situation as it relates to tariffs and their impact on video games, so anyone claiming to know how things will shake out may be speaking out of turn.
“All anyone can do at this point is speculate. We are certainly in uncharted waters here, and no one really knows what will happen next,” he told GameSpot. “Obviously, the announced tariffs are having an immediate impact on the financial markets. And given the haphazard nature of how the tariffs are being calculated and applied, uncertainty is really the only certain thing at the moment.”
Piscatella said there is “absolutely the chance” that the new tariffs or any additional future tariffs might amount to changes for US consumer products, and not just for Nintendo but for all players.
If the tariffs do increase the price, it won’t be a flat 25% increase or whatever the tariff is set to.
A misconception I keep seeing people incorrectly repeat is that a 25% tariff on an item I can buy at the store for $100 USD today, means tomorrow it will cost me $125. This is wrong, and not how tariffs work. If you see a price increase like that, that is price gouging, using a tariff as a shield. You are getting scammed.
The 25% tariff is based on whatever the imported cost of the item is, not the MSRP or final sale price. Lets just say for simplicity that the Switch 2 cost $100 for us to buy it. But, for a store to import the product, they buy it directly from Nintendo for a cost of just $35 USD per unit (again, for simplicity). A 25% tariff would be a tax of $7.50 USD that the store would need to pay per Switch console. In this hypothetical, a 25% tariff on that item would mean you would only expect to see a final price increase to $107.50 due to tariffs, and not a final price of $125.
Please be informed, don’t let yourself be scammed.
so expect to see $100 items at $125, got it
$135 for a game. Noted.
When entire industries are forming informal cartels, there is little individual consumers can do. That’s why antitrust authorities exist.
Don’t worry I’m sure they are working on getting rid of those too.
Interesting. For games consoles, the markup for retail is probably like 10 percent or less. So the final price in your example would be between 122.50 and 125 anyway, right?
*Also, my source on the 10% is a random Reddit commenter so take that with a grain of salt
Correct, tariffs are not a consumption tax. That fact doesn’t mean prices will not increase, nor does it mean that small increases don’t have a big impact. We, the common people, will have have to go about our lives with less. Maybe wear your shirts an extra day because laundering more regularly consumes more soap. Perhaps it’s going without avocado on your lunch sandwiches. You’ll still have shirts and sandwiches, but you certainly wouldn’t be as clean or as filled. (See the “surplus” chapter of your high-school/undergrad econ books.)
Yes, the prices go up, but not like how people seem to be normalizing. The price increase is generally only likely to be noticeable on items where stores sell at an incredibly tiny profit margin.
A 10% tariff does not mean a 10% MSRP price increase, it means an increase but of a lot less. But people are I guess not intelligent or informed enough to know this and so incorrectly say a 10% tariff means a 10% MSRP price increase, which again, is wrong.
Yep. My consumer concerns are less of retail sticker-shock than people not realizing how dependent they are on consumer surplus. Even a few thousand a year in tariff related expenditure can be quite impactful on comfort.
Sticker-shock will happen with the tariff-adjacent removal of de minimis. Right now it’s China, but it was threatened against Canada and Mexico too (officially delayed, whatever that may mean). A $50 per-item charge is going to be quite a surprise to many.
E.g. if Canada is going to be levied like China, then my plan of getting a pair of oversized Cam-Lock kits for my Canadian-made Arkel bike panniers is gone out the window. There’s no way I’ll buy small parts when the total package cost is the same as getting a whole new set of panniers.
Yes, but that is what a tariff is designed to do. It is designed to encourage you, the consumer, to not buy imported products, so that you buy domestic products instead.
It can be frustrating for consumers in a nation that is extremely dependent on imports, like the United States, because the US does not produce the products its consumers want to buy. If the tariffs remain long enough, the idea is that domestic companies will begin making the products that the consumers want to buy instead of importing, which is obviously beneficial to the economy in many ways, but for the consumer waiting for that to happen, it is hard to see past the number.
Also doesnt help that wages have stagnated while inflation has gone up due to corporate greed. Paying 2025 prices wouldn’t feel so bad if everyone was getting 2025 pay, but instead most of us are paying 2025 prices on like, 2008 pay. Not a fun experience.