New Tariffs May Lead Publishers To Abandon Physical Games, Says Analyst

When Donald Trump was running for reelection in 2024, he constantly spoke about his desire to add tariffs--or import taxes--on America's trading partners and rivals. Now, President Trump has gone through with that threat by imposing 25% tariffs on goods imported from Canada and Mexico, as well as an additional 10% tariff on goods from China. The Chinese tariffs are on top of the 10% tariff that Trump ordered on the country last month. Taken together, this new round of tariffs may spell trouble for physical video games, according to an industry analyst.

Circana's Mat Piscatella has shared his belief that physical video games that would be subject to these tariffs may simply not be made. Instead, publishers are likely to lean even harder on digital sales. Piscatella has previously written about the potential impact of these tariffs, while noting that manufacturing game discs in America isn't a viable option since physical sales have been declining for years.

During Trump's first term in office, the video game industry successfully lobbied his administration to exclude them from the tariffs he placed on Chinese goods. There was no carveout in Trump's newest round of tariffs. The Entertainment Software Association (ESA) issued a public statement earlier this month warning that these tariffs may have a devastating affect on all video game sales.

Because the costs of tariffs are almost always passed to customers, it's the American consumer who will bear the brunt of these expenses. Piscatella has also indicated that the price of games--both physical and digital--may rise in response to Trump's tariffs. There's also fear that the tariffs could trigger an economic downturn or even a recession, which would further hurt players' ability to afford games.