A report from The Game Business as part of the publication’s Summer Game Fest event details a presentation from Circana analyst and executive director, Mat Piscatella, who shows how US consumers are pulling back from spending on entertainment areas, video games included, due to the rising cost of essentials like food and shelter, and the potential impact of tariffs on the price of games and other goods.
As a Circana analyst, and with the wide range of industries that Circana collects data from, Piscatella has the ability to see the details in consumer spending in the US, and shows clearly how US consumers are concerned over the impact that tariffs will have on the prices of everything, from essential goods like food to the cost of clothes, and, key to Piscatella’s specialization, video games.
Whether people are opposed or in support of tariffs, a clear majority (69%) think that tariffs will result in high costs, The Game Business and Piscatella report. To make up for those rising costs, per Circana’s data, 30% of consumers will spend less on video games and entertainment subscriptions, with more of their spending money going towards the essentials, as Circana has also tracked that the average cost of food has gone up 2.3% compared to 2024, the cost of utilities has gone up 15.7%, car insurance has gone up 5.4%, and shelter has gone up 4%.
Since the Trump administration first announced its tariffs in April, the response we’ve seen from players in the US has been a concern for rising prices. Nintendo paused pre-orders of the Nintendo Switch 2 in the US while it accessed the potential impact of tariffs. The ESA expressed its belief that tariffs will have a “detrimental impact on the video game industry,” and even in The Game Business’ report this week, expressed that it has been trying to relay to the Trump administration the significance of the video game industry in the US, and how tariffs could negatively impact what is a $59 billion industry in the US alone.
When pre-orders for the Switch 2 were finally announced, the price of the console stayed the same, but the cost of accessories went up. There’s also still the chance that the cost of the console will increase due to tariffs.
Of course, it’s not just the cost of Nintendo products that has a chance of increasing. With costs going up on essentials, and tariffs looming as a greater threat to raise costs further, the downturn that the industry has been in might not end anytime soon.
When Grand Theft Auto VI arrives, it’ll be a much-needed shot in the arm for the video game industry, but it remains to be seen how long the impact of that shot will last.
