New US Tariffs Threaten Higher Console Prices and Decline of Physical Video Games

Analysts predict tariffs on imports from China, Mexico, and Canada could drive up hardware costs and push publishers toward digital-only game distribution.

The US government has introduced tariffs of up to 25% on imports from China, Mexico, and Canada, significantly impacting the gaming industry.
Analysts warn that the increased costs could lead to higher prices for consoles like the PS5, with some estimates suggesting price jumps of $100–$300 per unit.
Physical video games, which rely heavily on manufacturing in Mexico, may see reduced production or even a shift toward digital-only releases due to rising costs.
Sony and other companies are exploring options to mitigate the impact, such as shifting production outside of China or stockpiling inventory in the US, though these efforts may take time to scale.
The Entertainment Software Association and major gaming companies are advocating for tariff exemptions, citing the economic and cultural significance of the video game industry in the US.