According to one analyst, the fact that life in the US is becoming significantly more expensive for a number of reasons will surely take a toll on the state of the market.

A presentation by Mat Piscatella of Circana (formerly NPD Group), courtesy of The Game Business, reveals that U.S. consumers are reducing their spending on entertainment, including games, due to the rising cost of basic necessities, such as food and shelter, as well as the potential impact of tariffs on the price of games and other goods.

Piscatella provides insight into US consumer spending and illustrates how concerned US consumers are about the impact of tariffs on basic goods, including food, clothing, and games.

According to Piscatella, 69% of people believe that tariffs will result in higher costs. To offset these costs, Circana data shows that 30% of consumers will spend less on games and entertainment subscriptions and more on essentials. The data also shows that the average cost of food has risen 2.3%, utilities 15.7%, car insurance 5.4%, and accommodation 4% since 2024.

Since the Trump administration announced the tariffs in April, U.S. operators have expressed concern about rising prices. Nintendo has paused pre-orders of the Nintendo Switch 2 in the U.S. while assessing the potential impact of the tariffs. The Entertainment Software Association (ESA) believes the tariffs will negatively impact the gaming industry. The Game Business has also tried to convey to the Trump administration how important the gaming industry is to the US and how the tariffs could negatively affect the $59 billion industry.

When pre-orders for the Switch 2 were announced, the console’s price remained unchanged, but the price of accessories increased. There is still a chance that the console’s price will rise due to tariffs. With the cost of essential items rising and tariffs posing an even greater threat of further cost increases, the industry downturn may not end anytime soon.

The release of Grand Theft Auto VI will be a boon for the gaming industry, but it remains to be seen how long its impact will last.

Source: WCCFTech