ESA on Trump Tariffs: 'Not Just About Switch 2'

If you've been keeping up with economic news or are a Nintendo enthusiast, the past 48 hours have been nothing short of a rollercoaster. On Wednesday, the gaming community was hit with the news that the upcoming Nintendo Switch 2 would retail for $450 in the United States. This steep price, according to analysts, is influenced by anticipated tariffs, along with factors such as inflation, competition, and rising component costs.

The situation escalated quickly when the Trump Administration announced sweeping 10% tariffs on nearly all countries, with significantly higher tariffs imposed on major economies like China, the EU, Japan, Vietnam, Canada, Mexico, and others. In a swift response, China declared a 34% reciprocal tariff on all U.S. goods the very next morning. Amidst this global trade tension, 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 unprecedented scenario has left analysts, experts, and consumers grappling to understand its full implications. Just half an hour before Nintendo's pre-order announcement, I had a conversation with Aubrey Quinn, a spokesperson for the Entertainment Software Association (ESA), to discuss the broader impact these tariffs could have on the gaming industry.

The ESA is still navigating the uncertainties of these new tariffs. Quinn explained that while the industry anticipated some form of tariffs due to previous actions by the Trump administration and campaign promises, the extent and retaliation from countries like China were less predictable. The ESA expects further tariffs and levies from the U.S. in the future, but the long-term effects remain unclear.

However, the ESA is certain that 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."

The impact of these tariffs goes beyond just the cost of gaming systems. Quinn highlighted that consumer spending, company revenue, jobs, research and development, and even the design of future consoles are all interconnected and at risk. "The entire consumer ecosystem is connected," she emphasized.

In response, the ESA is taking action, albeit with challenges. With the Trump administration being newly appointed and largely composed of new members, establishing connections has been difficult. Nonetheless, Quinn affirmed, "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 forces with other trade associations to express their concerns to U.S. Trade Representative Jamieson Greer before the tariff announcement. They are also seeking meetings with legislators and administration officials to discuss these issues further. When asked if their efforts were making an impact, Quinn responded, "Yes. I can tell you conversations are happening with... I don't want to say every level. 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 representatives through letters, calls, emails, or social media to express their concerns. She believes that the more elected officials hear from their constituents, the more likely they are to take action. "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."

Just minutes after our conversation, Nintendo announced the postponement of Nintendo Switch 2 pre-orders due to the tariffs. When asked for further comment, Quinn stated that the ESA does not comment on individual company decisions. However, regarding the already high pricing of the Nintendo Switch 2, she added, "You know what? 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. 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."

She further emphasized the broad impact on the industry, saying, "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."