Analyst Warns Trump Tariffs May Result in Less Physical Disc Releases and Increased Retail and Digital Game Prices in the US

Potential Impact of Trump Tariffs on the Video Game Market

The recent Trump tariffs on imports from Mexico could significantly affect the U.S. video game market, according to industry analysis. As reported by Mat Piscatella, Executive Director and Video Game Industry Analyst at Circana, these tariffs, set at 25%, are likely to result in a reduction in disc-based game releases and an increase in prices for both physical and digital games.

Physical Releases at Risk

Piscatella predicts a “sharp downtick”in the availability of physical game releases in the United States, primarily because a substantial portion of the production infrastructure is situated in Mexico. The repercussions may not be limited to physical titles; if any games do enter production, the anticipated outcome is higher retail prices. This trend could extend to digital games as well, where the Manufacturer’s Suggested Retail Price (MSRP) may rise to maintain parity with physical versions. Unfortunately, as Piscatella points out, this scenario does not bode well for the future of the physical video game market.

Alright, well, video games.

With 25% tariffs on imports from Mexico on the way, I can see a sharp downtick in the number of disc-based games that get released physically in the US, as much of that production infrastructure is in Mexico.

If they do get made, I expect higher prices both phys & dig.

— Mat Piscatella (@matpiscatella.bsky.social) January 21, 2025 at 3:38 PM

Challenges of U.S. Production Relocation

While relocating production to the United States might seem like a viable solution to evade tariff repercussions, Piscatella indicates that such a shift would require substantial investment. However, with annual expenditures on physical video game software in the U.S. currently at half their 2021 levels and on a rapid decline, the likelihood of such investment appears slim. Moreover, relocating production wouldn’t significantly reduce costs, thus providing little incentive for companies to make that move.

‘Can’t that production just be moved to the US?’

With significant investment, sure. But annual US physical video game software spending is now half what it was in 2021 and declining rapidly.

And this also wouldn’t help when it comes to costs.

Not a good combo to incentive that investment. IMO.

— Mat Piscatella (@matpiscatella.bsky.social) January 21, 2025 at 3:45 PM

Inevitability of Price Increases

As the video game industry braces for the implications of the new tariffs, many industry stakeholders anticipate a price increase for video games to be almost unavoidable. A recent presentation titled the State of Video Gaming in 2025 by Matthew Ball, CEO of Epyllion, emphasizes the industry’s hope that upcoming titles, particularly Grand Theft Auto 6, will be priced above the existing $70 threshold. This would represent a shift in packaged game pricing following years of deflation, which has occurred despite escalating production costs.

As the situation unfolds, it remains critical for both consumers and industry professionals to stay informed about potential changes in pricing and availability of video games in the U.S. market.

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