The U.S. Tariffs on goods from China, Mexico, and Canada have gone into effect (with a subsequent pause until April 2 for Canadian and Mexican imports), and the outcome is a lot more serious than many people understand. Regarding the gaming industry, there's a real reason to start worrying about prices for the Nintendo Switch 2. While the industry doesn't normally need to worry about policies from the government unless they affect technology, this policy seems to affect the places where a lot of technology comes from.

One prominent player in the video game industry, Nintendo, may raise its prices for the Nintendo Switch 2 before it releases. Fans of Nintendo already had expectations of the prices of the next console, but a rise in costs normally gets ed on to the consumer. So, we can assume that the industry will see raised prices all around.

How Much Tariffs Will Impact Video Games & Electronics

You Could End Up Paying More

New U.S. tariffs on goods from China, Mexico, and Canada will likely affect the price and availability of video games and electronics in the U.S. The impact will depend on a few key factors. For instance, about 75% of video game consoles sold in the U.S. come from China, according to industry analyst Daniel Ahmad (via Bluesky), making them vulnerable to a 20% tariff on Chinese imports. Similarly, a lot of the production infrastructure is in Mexico, according to another analyst, Mat Piscatella (also via Bluesky), so a 25% tariff on goods from Mexico will significantly affect this area.

Another important factor is how manufacturers choose to handle the increased costs. Some companies plan to "absorb some of the costs" temporarily while moving production elsewhere, as ASRock told PCMag, while others might quickly the higher costs onto customers. This makes predicting the exact price increases tricky, but estimates suggest that certain graphics cards could see price hikes between $100 and $400, meaning the actual price increases could be greater than the tariff percentages suggest. ASRock's full quote to PCMag is as follows:

In the transition period, we may absorb some of the cost and also increase some in price to reflect the increased cost.

It also takes time and investments to relocate manufacturing to other countries like Vietnam or Taiwan, which could delay the full impact of the tariffs. Different products will likely be affected in various ways. Graphics cards are already seeing noticeable price increases, as mentioned by retailers like Newegg (as found by PCMag), so it's not much of a jump to assume games and consoles will see a similar hit.

Digital games may also get more expensive as publishers adjust their prices to match the higher costs of physical copies. The fact is that the broader economic situation is adding to the challenge of making and selling games. It's not hard to believe prices will go up when even comic books are preparing for the rise in costs.

Tariffs Could Realistically Cause The Switch 2 to Cost More

The Nintendo Switch 2 Could Balloon In Price

The new U.S. Tariffs on goods from other countries could create a tricky situation for the Nintendo Switch 2. According to Polygon, a lot of Switch production is still happening in China, which puts it at risk of a 20% tariff on imports from the country. While we don't know the exact percentage of Switch 2 production in China, industry experts like Daniel Ahmad have pointed out that Chinese manufacturing is common in video game consoles. This means a significant number of Switch 2 units headed for the U.S. might face these tariffs.

To manage these costs, Nintendo might use its strategy of diversifying production. According to Senior Analyst at MST Financial, David Gibson (via X, formerly Twitter), trade issues led Nintendo to move some of its Switch production to Vietnam. This experience could guide the company in getting around the current tariffs. It could help if Nintendo shifts more Switch 2 manufacturing to Vietnam or other countries that are not hit by these tariffs. However, this would take time and investment, which might delay the console's launch or affect initial availability.

Another option for Nintendo would be to absorb some or all of the tariffs cost. While unlikely, this would keep prices competitive. It could also have a domino effect that would convince other manufacturers to do the same. However, this is doubtful as platform makers generally do not make a profit on consoles, as MakeUseOf found in the Epic vs. Apple trial, and losing more money wouldn't be prudent. This would cut deeper into their profits, necessitating a careful look at the financial implications. They could also choose to absorb just part of the increased costs, leading to a moderate price hike.

Whether the price of the Switch 2 goes up in the U.S. will depend on what strategy Nintendo picks. A price increase is likely if most of the production stays in China. Efforts to shift manufacturing may reduce the impact, but probably won't eliminate the price increase for American consumers. Ultimately, it will all depend on how Nintendo evaluates the market and its own strategy. Either way, be it the company or the consumer, someone is going to have to pay higher prices for these tariffs.

How Much More Will The Switch 2 Cost?

The Prices Buyers Should Expect

Predicting how much the price of the Nintendo Switch 2 might rise in the U.S. due to tariffs is tricky and depends on several factors. The main uncertainty is Nintendo's manufacturing approach and whether they will absorb any cost increases from tariffs. Plainly speaking, a lot of Nintendo's production is still in China, so there's a 20% tariff hit immediately. If Nintendo decides not to move the location, it's part of the equation, but Nintendo will likely do what it can to cut costs overall, even if it is costly in the short term.

In a best-case scenario, let's say Nintendo has managed to move most of its production elsewhere, and only 20% of the components are made in China. So 20% of that share means about 4% in overall cost (20% of 20% is 4%). The original Nintendo Switch cost $300 on release, so we'll assume a base price of $300 for the Switch 2 as well. This would mean a final price of $312, but again, this is the best-case scenario where Nintendo doesn't try to make back the costs of moving its production facilities.

A more realistic situation would involve a larger portion of production still coming from China because moving production costs so much. If, for example, 50% of the production costs are affected by the 20% tariff, that would mean a 10% increase in costs, which would raise our initial calculation to $330. That's not much, but again, we're only considering a minimum growth.

I think that the Switch 2 will come out at a cost of $400 and that the increase would bring it to $460 if three-quarters were made in China.

Either way, it's hard to imagine the consumer won't be the one getting the brunt of the cost. Nintendo needs to make money, and if the company projected a certain profit before the tariffs, it will likely still want to see that profit. Likely, the company will do what it can to get Nintendo Switch 2 sales as close to this figure as possible, which would mean players may see increased costs soon.

Sources: Daniel Ahmad/Bluesky (1, 2), Mat Piscatella/Bluesky, PCMag (1, 2), David Gibson/X, Polygon, MakeUseOf