2025-04-03T09:04:48Z

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Nintendo unveiled its highly anticipated Switch 2 yesterday, coinciding with a significant announcement from former President Donald Trump in the White House Rose Garden. Trump detailed his latest and most extensive round of tariffs, which have raised concerns for Nintendo, as these new tariffs primarily impact the countries where the company manufactures its consoles. The new tariff rates can reach as high as 49 percent, and there is a strong likelihood that these increased costs may ultimately be passed on to consumers in the United States.

This predicament for Nintendo arises from the necessity to adapt to Trump's trade policies, which have significantly influenced its manufacturing strategies. Historically, Nintendo relied heavily on China for production; however, during Trump’s first term, a combination of trade tariffs, the COVID-19 pandemic, and geopolitical tensions stemming from Russia's invasion of Ukraine prompted the company to reassess its supply chains. As a result, Nintendo has diversified its manufacturing operations, with reports from the Financial Times indicating that more than half of its hardware sold in the U.S. is now produced in Vietnam and Cambodia.

Unfortunately, this shift may not be enough to shield Nintendo from the adverse effects of the new tariffs, as both Vietnam and Cambodia are among the countries facing the severest impact from Trump’s latest measures. As of yesterday, China has been subjected to an additional 34 percent tariff on its exports to the United States, while Vietnam faces a 46 percent markup, and Cambodia is now experiencing a staggering 49 percent increase.

One of the pressing questions is whether American consumers will bear the brunt of these new tariffs. Research conducted by the National Bureau of Economic Research during Trump’s first term revealed that U.S. consumers of imported goods were significantly affected by tariffs, as manufacturers and exporters often passed the majority of increased costs directly onto the end buyer.

The Switch 2 is set to launch globally on June 5th, with a retail price of $449.99. If we apply a rough estimate of the new tariffs averaging around 40 percent, consumers could see an additional cost of approximately $180, resulting in a potential final price of $629.99. For video game enthusiasts, this translates to higher game prices as well; for instance, Mario Kart World, which is expected to retail at $79.99, could climb to over $110 when factoring in the new tariffs. In a worst-case scenario, if we consider Cambodia’s 49 percent tariff, the prices could soar to around $670 for the console and $120 for the game.

However, it's important to note that the actual prices may not reach these alarming heights. Tariffs are typically calculated based on the declared value of a product at the time of import rather than its final retail price. While the exact declared value of the Switch 2 remains uncertain, reports indicate that shipments from Vietnam have been listed at around $338. If we apply the 40 percent tariff to this amount and then add the $112 difference between this declared value and the anticipated retail price, we arrive at a somewhat more manageable final price of approximately $585. Nevertheless, this price still raises concerns about affordability.

On a more optimistic note, several factors could alleviate the potential impact of these tariffs. Firstly, it is plausible that Nintendo has already accounted for these tariff considerations in setting its initial price for the Switch 2 at $449.99, which is a full 50 percent increase compared to the original Switch, priced at $299.99.

Secondly, it appears that Nintendo has taken proactive measures to mitigate the effects of tariffs by stockpiling hardware within the United States. According to reports from the Financial Times, the company has imported “hundreds of thousands” of consoles in anticipation of the tariffs, including 383,000 units shipped over just five days in January. While this stockpile is substantial, it’s worth noting that the original Switch sold an impressive 4.8 million units in the U.S. within its first nine months on the market. Therefore, there remains uncertainty as to whether Nintendo’s early imports will be sufficient to last through the initial holiday rush without necessitating a price hike.

Finally, a critical caveat remains regarding the future of these tariffs. While they are scheduled to take effect imminently, with a global 10 percent tariff beginning on April 5th and elevated rates commencing on April 9th, the unpredictability of Trump’s administration is a significant factor. This could merely be a strategic move designed to leverage negotiations, or it may be an empty threat altogether. Thus, there exists a strong possibility that these tariffs could be postponed or altered before Nintendo is compelled to pay any additional costs.

Updated April 3rd: Added an alternate calculation based on wholesale, not retail, prices.