New US tariffs on Chinese components and Mexican game discs threaten the gaming world, experts warn. As hardware prices climb and physical media dwindles, gamers brace for fewer choices while publishers see a profitable shift to digital dominance.
This set of tariffs has the potential to kill off the already struggling videogame retail business, according to analysts like Mat Piscatella of Circana.
Rhys Elliott, an analyst at MIDiA Research, provided WCCFTECH with a detailed response explaining how consumers will bear the brunt of this issue when the publication asked for his opinion on the matter.
The US tariffs, he says, will have far-reaching effects on the video game industry. Because China is one of the primary targets of the tariffs, it stands to reason that hardware will also be impacted.
As a direct consequence of the additional tariffs placed on components manufactured in China, GPU online sellers such as Newegg have already initiated price increases for the 50 series of NVIDIA graphics processing units (GPUs).
In this situation, he says, the impact has been little thus far. Nonetheless, the effects will become more apparent in the future when supplies of GPUs, cellphones, and other US consumer gadgets dwindle.
Additionally, it is already happening that some firms are moving their manufacturing to countries that are not affected by tariffs. However, this is only feasible for the largest enterprises with the financial resources to absorb the reduced profit margins.
The Steam Deck is one of several hardware devices that sells at a loss or barely breaks even. To avoid having their whole addressable markets reduced, software businesses like Valve (for Steam Decks) and Sony (for PS5s) may choose to just absorb the tariffs’ additional costs.
Physical media will also be affected by the tariffs, since many game discs sold in the US are manufactured in Mexico, another target of the levies. According to what Mat Piscatella stated on BlueSky, there are certain publishers who eventually will decide not to release physical editions of their games.
Even if it would be beneficial for publishers, the demise of physical games would ultimately be detrimental to customers since it would reduce the number of options available to them.
Finally, Elliott asserts that tariffs are detrimental to gamers and the gaming industry as a whole.
Luis Gochoco is a seasoned managing editor and writer with over a decade of experience covering politics, technology, gaming, and entertainment news. With a keen eye for breaking stories and in-depth analysis, he has established himself as a trusted voice in digital journalism. Luis is one of the key forces behind the success of GameNGuide, contributing to 12 million views through engaging and high-traffic content. He also played a pivotal role in generating 8 million views on International Business Times, shaping the platform’s technology and gaming coverage.
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