The Trump tariffs on imports from Mexico could have a strong impact on the video games market in the United States and lead to fewer disc-based releases and higher prices for both physical and digital games, according to an analyst.
Speaking on Bluesky, Circana Executive Director and Video Game Industry Analyst Mat Piscatella highlighted how 25% tariffs on imports from Mexico could lead to a "sharp downtick" in the number of physical releases in the United States, as much of the production infrastructure is located in Mexico. If they do get made, prices could rise for both physical and digital games, as digital games' MSRPs would be increased to remain at price parity with physical releases. No matter what happens precisely, however, Mat Piscatella doesn't see anything good coming for the physical video game market in the near future.
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
I would, were this to happen, anticipate digital MSRPs to increase to remain at price parity with physical, but who knows.
In any case, none of this is good for the physical video game market.
— Mat Piscatella (@matpiscatella.bsky.social) January 21, 2025 at 3:40 PM
The analyst remarks that moving the production of retail releases to the US to avoid being impacted by the Trump tariffs is definitely possible with significant investment. However, this significant investment is unlikely to come, as annual US physical video game software spending is half what it was in 2021 and is declining rapidly. At the same time, moving production to the US wouldn't help when it comes to cost, so there aren't a lot of incentives to move production to the United States.
'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
No matter what is going to happen in the near future with the new Trump tariffs, it looks like a price increase for video games seems almost inevitable, and the whole industry seems to be pushing towards it, in one way or another. As highlighted in a new State of Video Gaming in 2025 presentation by CEO of Epyllion Matthew Ball, much of the video game industry is hoping that Grand Theft Auto 6 will be priced higher than the current $70 barrier and thus re-establish packaged game pricing after decades of deflation despite rampant cost growth.
About the author: Francesco De Meo has been covering video games and technology since 2012, starting his career at small outlets like Gamersyndrome and GeekSnack. After joining Wccftech gaming section in 2015, he quickly expanded his video gaming coverage with in-depth reporting, interviews with iconic industry figures such as Grasshopper Manufacture founder and No More Heroes creator Goichi "Suda51" Suda, Resident Evil series creator Shinji Mikami, Team NINJA's president and Nioh series director Fumihiko Yasuda, and Silent Hill creator Keiichiro Toyama, reviews and on-the-ground coverage of major industry events such as Gamescom and E3. When he's not reporting or reviewing, Francesco can be found playing the genres he loves most, spending time with his six cats, reading, writing music, playing guitar and drumming for his progressive rock band.
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