Import tariffs may accelerate the death of physical video games

The big picture: Although the Trump administration just announced a one-month delay on most imports from Canada and Mexico, the eventual resumption of tariffs on Mexican goods could significantly impact the production of physical video games. This unintended consequence may compound the challenges already expected to slow the gaming industry due to existing tariffs on Chinese imports. Analysts predict that a 25 percent tariff on goods imported from Mexico would substantially affect the U.S. retail console game market. Since Mexico plays a crucial role in physical game production, these import duties could lead to higher prices or an increased shift toward digital-only game releases. While video game discs sold in the U.S. were once manufactured domestically, analysts Mat Piscatella of Circana and Daniel Ahmad of Niko Partners note that much of the industry's critical production infrastructure has since moved to Mexico. Historically, nearly all of Sony's discs were produced at an Indi ... Read full article.