Trump tariffs threaten to delay Korean developers’ console gaming ambitions

With U.S. President Donald Trump’s “reciprocal” tariffs expected to push up retail prices of major video game consoles, concerns are growing that this may slow down Korean game developers’ efforts to enter the market.

According to U.S. Customs and Border Protection, video game consoles and machines were not included in the Trump administration’s tariff exemptions for the tech sector, thus placing the Nintendo Switch 2, Sony PlayStation 5, and Microsoft Xbox Series X and S under higher tariffs.

If the measures take full effect after the ongoing 90-day reprieve on the tariffs ends, consoles manufactured in countries like China and Vietnam will face up to 145 percent additional duties.

As a result, Nintendo has delayed preorders for the Switch 2 from when they were originally scheduled to begin on April 9 and announced last week that they would begin instead on April 24. The Japanese game giant said the new game machine will cost $449.99 in the U.S., the same price first announced on April 2, but added that future changes in cost are possible for “any Nintendo product.”

Sony also increased the price of its digital edition PlayStation 5 console in the United Kingdom and Europe, citing inflation and economic instability. This was seen as a preemptive move before tariff increases on tech products potentially affect its supply chain.

Until recently, the Korean game industry was thought to be largely insulated from the potential impacts of the tariff, given its strong focus on PC and mobile platforms. According to the Korea Creative Content Agency (KCCA), mobile and PC games accounted for 19.4 trillion won, or 84.9 percent, of the total 22.96 trillion won in total revenue for Korean game studios in 2023.

More recently, however, Korean game companies have been actively targeting the console game market in an effort to diversify their domestic-focused portfolios and expand into North American and European markets. This shift comes amid a slowdown in growth for the mobile gaming sector and several success cases in console gaming.

The KCCA's data showed that the combined mobile game sales of the country’s top 10 game companies fell by 9.2 percent in 2023 from the previous year. Industry insiders attribute the decline to formulaic and predictable gameplay and heavy monetization models.

“With growth in China limited by the country’s licensing system and the domestic market nearing saturation in mobile gaming, Korean developers ultimately need to enter North American and European markets, which are dominated by console games,” an industry official said. “Recent success cases, including Neowiz’s Lies of P and Nexon’s Dave the Diver, have demonstrated that such expansion is possible.”

Following these successes, a slew of console titles are now in studio pipelines.

Nexon recently released its action game The First Berserker: Kazan globally through PC and game consoles. Based on its hit IP from the Dungeon & Fighter series, the title is widely viewed as the developer's biggest release this year.

Pearl Abyss is preparing to launch its highly anticipated PC and console title Crimson Desert later this year. Krafton, which sold over 1 million copies of its life simulation game inZOI in its first week of early access, is now developing the title for console platforms, and Kakao Games is also scheduled to release its PC and console game Chrono Odyssey later this year.

At the same time, NCSOFT is developing a console game project titled LLL, while Netmarble is working on Game of Thrones: Kingsroad for console platforms.

A prolonged high-tariff environment will inevitably bring a contraction to the console device market, which will slow down the influx of new users and games. For developers preparing new console titles, the uncertainty surrounding tariff risks may lead to delays in release schedules until the situation becomes clearer.

“While game content itself is not subject to tariffs currently, the potential impact of tariffs on the console market means that major Korean game firms should not be complacent just because console titles are yet to make up a large part of their portfolio,” the official said. “They need to closely examine both their future plans to expand into console games and what effect tariffs could have.”