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The physical video games market may come to an end even sooner than expected, as US President Donald Trump threatens tariffs on Mexico.
Now that Donald Trump has once again been inaugurated as the president of the US he’s already talking about tariffs against countries including Mexico and Canada, and that could have a serious effect on the video games industry.
He previously threatened tariffs against China too, which the games industry soon realised would potentially make consoles and games more expensive, with business experts saying it would only hasten the death of the physical games market.
It’s possible companies like Nintendo, Microsoft, and Sony will successfully lobby for an exemption on electronic goods (as they did once before), but so far Trump hasn’t confirmed that the Chinese tariffs will go ahead – but they will for Mexico and Canada.
now Trump is threatening tariffs on Mexico as well, which analyst Matt Piscatella believes will lead to less physical releases in the US.
As reported by the BBC, Trump told Oval Office reporters that he could force tariffs upwards of 25% on imports from Mexico, as well as Canada, as early as February 1 unless they take stronger measures to prevent illegal migrants and drugs from entering the US.
In a recent Bluesky thread, Piscatella points out that this will have a knock-on effect on physical video games since ‘much of that production infrastructure is in Mexico.’
Piscatella believes this could result in a ‘sharp downtick in the number of disc-based games’ released in the US, and most certainly further incentivise increasing prices for both physical and digital games.
Piscatella does acknowledge the hypothetical possibility of moving production to the US, but this wouldn’t solve the issue since ‘annual US physical video game software spending is now half what it was in 2021 and declining rapidly.’
There’s no telling if this will have wider ramifications for the games market in the UK or elsewhere in the world, but it doesn’t look good from a consumer or preservationist standpoint.
According to the Financial Times, Mexico’s president Claudia Sheinbaum has responded to Trump’s threats by saying, ‘We will defend our sovereignty,’ and ‘It’s always important to have a cool head and refer to the decrees rather than the discourse.’
As for the aforementioned tariffs for China, those are dependent on whether Chinese company ByteDance agrees to sell at least half of TikTok’s ownership to a US company, which is also a stipulation for Trump’s removal of the TikTok ban that was signed off by the Biden administration.
Trump’s inauguration took place on January 20 and aside from his other radical executive orders, the conversation has been dominated by arguments over whether Elon Musk did a Nazi salute.
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