Nintendo President Shuntaro Furukawa shared a dire warning to investors about where not only Nintendo, but the industry is, because of tariffs.
As translated by IGN, Furukawa shared these statements in the company’s latest financial earnings call:
The unit sales price is high, and there are corresponding hurdles, however we are aiming for a launch on par with (the first) Switch.
If prices of daily necessities like food increase (because of the tariffs), then people will have less money to spend on game consoles. If we were to adjust the price of the Switch 2 (in response to the tariffs), this could decrease demand.
We did previously report on Nintendo’s forecast that they will sell 15 million units of the Switch 2. Furukawa also elaborated that Nintendo’s forecast is based on assumptions that US tariffs will stay with China at 145 %, and with Japan, Vietnam, and Cambodia at 10 %.
As many video game analysts and industry professionals shared on social media, he confirmed that Switch consoles sold in North America is made in Vietnam. However, some Nintendo products, including amiibo, controllers, and other accessories, are made in China. It’s also based on the assumption that Switch software will remain exempted from these US tariffs, because Switch and Switch Game Cards fall under the category of non-volatile memory.
Video games, of course, are a hobby, and do not fall under the category of basic human necessities. There is an argument to be made that entertainment industries can make money in down economies, because people are looking for an escape from their daily woes. But that can be a double-edged sword and somewhat misleading in reality.
Case in point, many fans remember that 1933’s King Kong became one of the first ever blockbusters in the middle of the Great Depression, giving moviegoers the escape they needed in between unemployment lines. But its success was not enough to stem the wave of layoffs and studio closures that happened in Hollywood at the time. Hollywood, and the US, would recover in the years after the movie’s release, not because of RKO’s great success, but because the movie came out the same year as Franklin Delano Roosevelt was elected as US president. Roosevelt would enter a far ranging economic recovery plan called the New Deal, which is itself remembered for years as one of the most successful and indelible US policies in the country’s history.
Here and now, there doesn’t appear to be an analogue to the New Deal that would create economic recovery for the US and its video game industry. It’s hard to argue with Nintendo’s conscientiousness with how to navigate their launch for this year, and the coming months after will likely be managed the same.
