Gaming is getting more expensive under Donald Trump

The gaming industry is set to face some hurdles as a result of President Donald Trump’s tariffs, with enthusiasts expected to face rising prices as imports of consoles and development components become increasingly expensive.

On Thursday, Xbox developer Microsoft announced that console prices would be rising significantly due to “market conditions and the rising cost of development,” without citing the tariffs directly.

Why It Matters

Tariffs are expected to weigh heavily on a number of industries, with consumers set to see prices rise as companies attempt to cope with the impact of higher import fees. This effect is likely pronounced for the gaming industry, given the reliance on hardware and software from China, the principal target of Trump’s aggressive trade measures.

What To Know

While the administration recently announced tariff exemptions for smartphones, laptops and certain other electronic devices, gaming consoles and physical games have not yet been granted an exemption from the 145-percent duty on Chinese imports.

With its announcement, Microsoft now joins several other companies that have had to either raise prices or adjust their operations as a result of current economic uncertainty.

According to a report from CNBC, Xbox Series S with 512GB of storage costs $379.99 in the U.S. as of May 1, up from $299.99. The Xbox Series X will go for $599.99 instead of $499.99. Meanwhile, the price of the special edition of the Xbox Wireless Controller will increase $10 to $79.99.

In early April, days after Trump’s Liberation Day announcement of reciprocal tariffs, Nintendo postponed pre-orders for the long-awaited Switch 2 for U.S. customers.

“Pre-orders for Nintendo Switch 2 in the U.S. will not start April 9, 2025 in order to assess the potential impact of tariffs and evolving market conditions,” Nintendo said in a statement to Newsweek at the time.

Nintendo has not yet adjusted the $449.99 price tag for the Switch 2, scheduled for release in early June, but warned of price adjustments for console accessories “due to changes in market conditions.”

“Other adjustments to the price of any Nintendo product are also possible in the future depending on market conditions,” the company said on April 18.

According to an internal assessment memo from a Nintendo supplier, seen by Nikkei Asia, the majority of Switch consoles are manufactured in China and will be impacted by the 145 percent tariffs on the country’s imports.

Newsweek has reached out to Nintendo via email for comment.

Toyo Securities’ Hideki Yasuda told Bloomberg that Nintendo, which began shifting much of its manufacturing operations to Vietnam during Trump’s first term, would likely be able to absorb the 10 percent baseline tariff announced by Trump on April 2. However, he added that the situation will be worse for PlayStation maker Sony, which “may be forced to hike PS5 prices in the US in the near future.”

In mid-April, Sony announced that it had made the “tough decision” to raise retail prices for the PS5 Digital Edition in Europe, the United Kingdom, Australia and New Zealand. In its announcement, the Japanese game developer cited the “backdrop of a challenging economic environment, including high inflation and fluctuating exchange rates.”

During his first term, Trump threatened to impose tariffs on Chinese technology goods and components used in products like video game consoles. In response, Microsoft, Sony and Nintendo submitted a joint letter to the U.S. Trade Representative, warning of the “enormous impact and undue economic harm” that these would have on “the entire video game ecosystem.”

“For those purchases that do go forward despite tariffs, consumers would pay $840 million more than they otherwise would have,” they wrote, citing a study by Trade Partnership Worldwide.

Newsweek has reached out to the Commerce Department via email regarding the possibility of tariff exemptions for the gaming industry.

What People Are Saying

Microsoft, in its announcement of price increases on Thursday, said: “We understand that these changes are challenging, and they were made with careful consideration given market conditions and the rising cost of development. Looking ahead, we continue to focus on offering more ways to play more games across any screen and ensuring value for Xbox players.”

The Game Business newsletter author Christopher Dring told the BBC on Thursday that Trump’s tariffs were “certainly” part of Microsoft’s motivation to raise prices, alongside other factors such as inflation and the “general rising cost of business.”

“With accessories and components made in China, the connection is pretty obvious,” he said.

Anbernic, a Shenzhen-based retro console developer, in a recent announcement, said: “Due to changes in U.S. tariff policies, we will be suspending all orders shipping from China to the United States starting today. We strongly recommend prioritizing products shipped from our U.S. warehouse, which are currently not affected by import duties and can be purchased with confidence.”

Mat Piscatella, executive director of games at market intelligence firm Circana, told Yahoo Finance last month: “Entering the year, I had expected US consumer spending on video games to grow 4.8 percent compared to 2024. Were all currently announced tariffs fully implemented…a reasonable expectation could be a high single-digit percentage decline or a drop into the double-digit percentages. It’s simply impossible to have much confidence in any forecast right now.”

The Entertainment Software Association, told Game File that the tariffs announced by Trump on April 2, “are going to have a real and detrimental impact on the video game industry.”

What Happens Next?

Trump has paused reciprocal tariffs for 90-days as of April 9 with the exception of China while China has imposed a 125 percent tariff on some U.S. goods. The Trump administration has said it’s hopeful about the prospect of securing a deal with Beijing which would bring its 145-percent duties down, though Chinese officials have repeatedly rejected this possibility.

Update 5/2/25, 9:06 a.m. ET: This article has been updated with additional information.