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

The past 48 hours have been a whirlwind for economics enthusiasts and Nintendo fans alike. On Wednesday, it was revealed that the Nintendo Switch 2 would launch at a steep price of $450 in the U.S. Analysts attribute this high cost to a combination of factors, including anticipated tariffs, inflation, competition, and rising component costs.

The situation escalated when, on the following night, the Trump Administration unveiled sweeping 10% tariffs on goods from nearly every country, with significantly higher tariffs targeting nations such as China, the EU, Japan, Vietnam, Canada, Mexico, and others. In retaliation, China announced a 34% reciprocal tariff on all U.S. goods early this morning. Amidst this turmoil, Nintendo decided to pause 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 everyone, from industry insiders to the general public, grappling to understand its full implications. Just 30 minutes before Nintendo's announcement, I had the opportunity to discuss these developments with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to explore the broader impact of these tariffs on the gaming industry.

The ESA, like many others, is currently navigating the uncertainties surrounding these tariffs. Quinn noted that while the ESA anticipated some form of tariffs due to President Trump's previous actions and campaign rhetoric, the extent and immediate impact were unexpected. They are now bracing for possible retaliatory measures from other countries and further U.S. tariffs.

Despite the ongoing uncertainties, the ESA is clear on one point: these tariffs will negatively 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 emphasized that the impact of these tariffs would extend beyond just the price of gaming systems. She noted, "It's hard to imagine a world where tariffs like these don’t impact pricing." She also highlighted the broader economic effects, including reduced consumer spending, lower company profits, potential job losses, and decreased investment in research and development, which could influence the design of future consoles. "The entire consumer ecosystem is connected," she remarked.

In response to these challenges, the ESA is actively engaging with policymakers. Although the new Trump administration has been in office for only two months, with many new appointees, the ESA is diligently working to establish new connections and communicate the potential risks to U.S. businesses and consumers. Quinn explained, "But yes, the short answer is 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 that 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 express concerns to U.S. Trade Representative Jamieson Greer and is seeking meetings with various legislators and administration members to discuss these issues further. When asked about the effectiveness of these efforts, Quinn confirmed that discussions are taking place at multiple levels of government, though not directly with President Trump. "Yes. I can tell you conversations are happening with... I don't want to say every level," she said. "I've not met with Trump, right? So I don't want to say every level of government, but certainly we've met with members of the administration. We've met with employees at the White House, we've met with employees at USTR [the office of the United States Trade Representative], so yes, we are having conversations and we're also doing that in partnership with other associations to make sure that... This isn't a video game issue. 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 advised reaching out to their elected representatives through letters, calls, emails, or social media to voice their concerns. She believes that increased engagement from constituents could lead to greater awareness and potential policy changes. "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."

Nintendo's decision to postpone pre-orders for the Nintendo Switch 2 came shortly after our conversation ended. While the ESA does not comment on individual company decisions, Quinn acknowledged the timing of the Nintendo Switch 2 announcement coinciding with the tariff news. She stressed the wide-reaching impact of these tariffs on various gaming platforms, from consoles to VR headsets and smartphones. "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."