Nintendo fans across the US are breathing a sigh of relief as they tear apart the boxes housing their new Nintendo Switch 2 video game consoles.
“What saved Nintendo in this case was that Trump chickened out,” Notre Dame professor and international economist Robert Johnson said.
Vietnam tariffs forced Nintendo to scramble Since its launch in March 2017, the Switch has become one of the best-selling video game consoles in history, with more than 150m units sold worldwide.
Gamers flocked to various social media sites to vent their frustration – much of it directed not at Nintendo, but at the Trump administration.
Increasingly, the real moneymakers – for Nintendo and its competitors – are software and online subscriptions, neither of which are subject to tariffs.
With a sigh of relief, Nintendo fans in the United States are tearing apart the boxes that contain their new Nintendo Switch 2 video game consoles. Because of Donald Trump’s inconsistent trade policies, which caused Nintendo to postpone pre-orders, the highly anticipated hardware’s June 5 release date felt more like a wish than a guarantee. On launch day, there was a possibility of a price increase from $450, but prospective customers’ concerns were allayed.
That being said, Nintendo is far from done evading Trump’s tariffs. Fortunately, the Japanese game developer was able to release its product right during the president’s 90-day tariff pause. Nintendo will have to prepare for yet another delicate trade policy dance, according to experts, if tariffs on nations like Japan and India return to the levels suggested during Trump’s “liberation day” speech at the beginning of April.
If you purchase a Switch 2 during the holidays, it might cost more than it did when it was first released. The Switch 2 story has been eagerly anticipated by Nintendo’s main rivals in the gaming hardware market, as well as by pretty much anybody shipping electronics to the US.
According to Robert Johnson, an international economist and professor at Notre Dame, “Trump’s chickening out was what saved Nintendo in this case.”.
Vietnam tariffs made Nintendo scurry.
With over 150 million units sold worldwide since its March 2017 launch, the Switch has emerged as one of the best-selling video game consoles ever. In January, Nintendo hinted at its successor, which it fully unveiled on April 2 in a live stream. The company said the device would retail for $450 in the US on June 5 (or $500 when combined with Mario Kart World). Hours later, Trump announced a fresh round of import tariffs on nations with a trade deficit with the US from a podium at the Rose Garden, carrying a chart.
A 24 percent tariff on Japan, the location of Nintendo’s headquarters, and a 46 percent tariff on Vietnam, the country where the majority of its Switch manufacturing is done, are two examples. As Nintendo fans collectively questioned whether the company would pass the costs of those high duties on to them, stock markets crashed.
On April 9, later that week, US pre-orders for the Switch 2 were scheduled to open. In order to “assess the potential impact of tariffs and evolving market conditions,” Nintendo postponed that date. According to the company, the June 5th release date would not change. A lot of the ire that gamers expressed on social media platforms was not aimed at Nintendo, but rather at the Trump administration. The console sold out as soon as pre-orders opened again on April 24.
A request for comment was not immediately answered by Nintendo.
Anticipating incorrect tariffs, “taco” saved the day.
According to Johnson, Nintendo has struggled for years with the issue of where to locate production, just like many other manufacturers of consumer electronics.
The gaming company started moving the Switch’s manufacturing from China to Vietnam in 2019 toward the end of the first Trump administration in an attempt to avoid US tariffs on Chinese imports. Although some Switch products are still made by Nintendo in China, they are usually sold in countries outside of the US. To lessen the effects of tariffs, Apple and other large consumer tech companies have also shifted some of their manufacturing from China to nations like India.
Johnson claims that the current administration’s surprise announcement of a 46 percent tariff on imports from Vietnam “caught virtually everyone off-guard,” ultimately making that strategy moot. The pricing dynamics of almost any consumer tech product entering the US could be impacted by these impending tariffs and the uncertainty surrounding them.
Like Nintendo, Sony and Microsoft are anticipated to release new consoles in 2027.
New production facilities require substantial capital expenditures and a considerable amount of time to bring online. Operating in a stable environment is highly preferred by producers. Johnson spoke. That is not at all the case in the current trade environment. “.”.
A higher price or a delayed release of the Switch 2 could have easily resulted from the “liberation day” tariffs. However, Nintendo was spared that fate because of the Trump administration’s reversal, which the Financial Times characterized with the acronym “taco,” which stands for “Trump always chickens out.”. By calling for a 90-day tariff halt to facilitate talks with targeted nations, Trump allowed the Switch 2 to be released during a period when import taxes would not be imposed.
Furthermore, according to reports, Nintendo has already shipped about 746,000 Switch 2 units to the US, which would not be impacted by the higher tariffs, even if talks with Vietnam ultimately fall through.
more expensive accessories.
Customers of Nintendo will not escape the effects of tariffs unharmed. Accessories for the Switch, which make up a significant portion of its dual form factor, will “experience price adjustments,” according to the company. Docks for playing the Switch on a full-size screen will cost $10 more than they did previously, and straps for the two controllers will cost $1 more, according to CNBC. Additionally, if Trump proceeds with a 46 percent tariff on Vietnam, Johnson stated that he would not be shocked if Nintendo thought about increasing the console’s price around the holidays.
“It’s hard for me to think that the Trump administration will want thousands of stories about how Trump ruined Christmas to be written over the holiday season,” Johnson said. I anticipate that they will figure out a way to descend, but like everyone else, I’m not positive. “”.
However, the fact that physical console sales do not account for the majority of Nintendo’s revenue suggests that the company may have an incentive to prevent console prices from rising too high. Software and internet subscriptions are becoming Nintendo’s and its rivals’ main sources of revenue, and neither of these is impacted by tariffs.
“Nintendo’s ultimate goal is to sell consoles so that people will purchase games and accessories,” Johnson stated. It might therefore be prepared to keep console prices low. “”.
