PS5 Consoles May Cost More and Physical Games Could Be Killed by US Tariffs, Analysts Warn

In line with their promise, the U.S. administration has imposed tariffs on imports coming from China, Canada, and Mexico. These trade actions, as per experts’ predictions, are expected to significantly affect various sectors within the gaming industry, encompassing PlayStation 5 games and consoles.

In case you’ve missed recent updates, the U.S. government has imposed a 25% tariff on most imports originating from Canada, Mexico, and China, along with a 20% tariff on Chinese goods specifically.

In practice, if these product-making companies absorb the costs themselves, industry experts and shop owners anticipate that these added expenses will ultimately be transferred to consumers. This translates into a general increase in product prices.

Analysts are offering their insights about the potential impact on video game enthusiasts, given that most hardware is made in China, and the majority of physical games are printed in Mexico.

As a dedicated gamer, I’ve learned that nearly three-quarters of the gaming hardware we enjoy comes from China. It seems that some game companies are already relocating their production lines to Southeast Asia due to potential complications, but ramping up production there will take time and effort.

To clarify, Sony has stated they are accumulating a specific amount of strategic inventory in the U.S., which gives them some breathing room, but ultimately, they will face tariffs when they exhaust this stock. Moreover, they’ve disclosed plans to mass-produce PlayStation 5 units in various other countries.

However, although this move might safeguard American consumers from potential rises in the price of PlayStation equipment, Circana analyst Mat Piscatella suggested that it could signal the end for physical game sales instead.

It’s quite likely we might observe the creation of physical games facing tariffs being halted, leading publishers to adopt a completely digital approach instead.

It’s common knowledge that the boxed video game market has been shrinking, but since the majority of Blu-ray discs are manufactured and packaged in Mexico, this trend might be the last nail in the coffin for these industries.

It’s plausible that companies might shift their production to the U.S. or other regions, given the current decline in physical game sales. However, considering Piscatella’s theory, it seems logical that publishers might decide not to invest in these markets if sales aren’t promising enough.

Absolutely, it’s important to stay patient and observe the situation unfold. There’s a chance that the video game industry could negotiate exceptions or reductions in tariffs. At present, we can’t predict exactly how prices for games and hardware might change.

2025-03-06 09:37

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