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 community was hit with the news that the Nintendo Switch 2 would retail at a steep $450 in the United States. Analysts attribute this high price to a mix of factors including anticipated tariffs, inflation, competition, and rising component costs.

Then, in a late-night announcement, the Trump Administration unveiled expansive 10% tariffs on nearly all countries, with significantly higher tariffs imposed on major 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 early this morning. Amidst this escalating trade war, Nintendo decided to postpone pre-orders for the Nintendo Switch 2 in the U.S. to reassess the impact of these tariffs on their console strategy.

This rapidly unfolding scenario is unprecedented and is leaving analysts, experts, and the public scrambling 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 the potential impacts of these tariffs on the gaming industry.

The ESA, like many others, is still navigating through the uncertainties these tariffs present. Quinn noted that while tariffs were anticipated given Trump's previous actions and campaign rhetoric, the exact nature and extent of these tariffs were still a surprise. The ESA expects potential retaliatory measures from countries like China and further U.S. tariffs, but the full impact remains uncertain.

Quinn expressed confidence, however, that these tariffs would negatively affect the video game industry. "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," she stated. "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 emphasized that the impact would extend beyond just the pricing of gaming systems. "It's hard to imagine a world where tariffs like these don't impact pricing," she remarked, adding that consumer spending and, consequently, company revenues would also be affected. This could lead to job losses, reduced investment in research and development, and even influence the design of future gaming consoles. "The entire consumer ecosystem is connected," she noted.

In response, the ESA is actively engaging with the new Trump Administration, despite the challenges of forming new relationships with recently appointed officials. "We know who the conversations need to be happening with, and we are working on making connections and making sure that they understand that we are eager to work with them to find solutions," Quinn explained. "This is about public, private sector conversations happening, so we can understand and make sure that they see the impact and the risk of impact to business, to consumers, and really everything that's happening within the US borders."

The ESA has already joined a coalition of trade associations to voice their concerns to U.S. Trade Representative Jamieson Greer before the tariff announcement. They are also seeking meetings with legislators and administration members to discuss these issues. When asked if these efforts were making an impact, Quinn confirmed that conversations were indeed taking place at various levels of government and in partnership with other associations. "This isn't a video game issue," she stressed. "I represent the video game industry, so I'm very aware of the impact on the video game industry, the potential impact, but it's not a video game industry. This is going to affect all consumer products from food to fashion to electronics."

For concerned consumers, Quinn suggested reaching out to their representatives. "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."

Minutes after our conversation concluded, Nintendo announced the postponement of Nintendo Switch 2 pre-orders due to the tariffs. While the ESA does not comment on individual company decisions, Quinn reflected on the broader implications of the tariffs on the gaming industry during our discussion. "It's been interesting with media coverage around video games and tariffs because just unfortunate coincidental timing that the Switch [2 reveal] was the same day as President Trump's announcement," she said. "There are so many devices we play video games on. There are other consoles, but as I was saying, VR headsets, our smartphones, people who love PC games, if we think it's just the Switch, then we aren't taking it seriously. This is going to have an impact."

Quinn further emphasized the broad reach of these tariffs, affecting not just Nintendo but all companies reliant on international supply chains. "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."