Proposed tariffs by US President Donald Trump on imported video game consoles could impact Korean game developers aiming to enter the console market.

The tariffs may impose duties of up to 145% on consoles made in countries like China and Vietnam. This would likely increase retail prices for major consoles such as the Nintendo Switch 2, Sony PlayStation 5, and Microsoft Xbox Series X and S.

Nintendo has postponed preorders for the Switch 2 from April 9 to April 24 and may adjust its US$449.99 base price. Sony also raised the price of its digital PS5 in Europe and the UK due to economic uncertainties and inflation.

Korean developers, who have mainly focused on mobile and PC platforms, are now turning to console gaming to expand into North America and Europe.

Experts warn that high tariffs could shrink the console market, delay game releases, and slow adoption, urging developers to factor this into their expansion plans.

🔗 Source: The Korea Times

🧠 Food for thought

1️⃣ History repeats: The console industry has faced tariff threats before

This isn’t the first time the console gaming industry has confronted tariff challenges. In 2019, Microsoft, Sony, and Nintendo issued a joint letter opposing a proposed 25% tariff on Chinese-manufactured consoles, warning of “disproportionate harm” to the industry 1.

Their concerns were significant because over 96% of video game consoles imported into the U.S. at that time came from China, showing how concentrated and vulnerable the supply chain was 1.

The manufacturers warned that those earlier proposed tariffs would cost U.S. consumers an additional $840 million and potentially lead to a $350 million net loss for the American economy, despite the tariff revenue 2.

Some companies like Nintendo began moving production out of China even back then, while others warned of inevitable price increases. This historical context explains why console makers are so alarmed by the current 145% tariff rate—it’s exponentially higher than the 25% rate they previously described as potentially devastating.

2️⃣ The timing threatens Korea’s national strategy to enter console gaming

The tariffs couldn’t come at a worse time for Korean developers, as they coincide with a deliberate national strategy to pivot toward console development after decades of focusing primarily on PC and mobile games.

Despite being the fourth-largest gaming market globally, Korea accounts for only 1.5% of global console game revenues—a market imbalance the government is actively trying to correct 3.

The Korean government recognizes this opportunity, announcing a five-year plan to grow the country’s console market share and has committed approximately $12.6 million in funding starting in 2025 specifically to support console game development 4.