Earlier this month, the Trump Administration announced that it would be imposing major tariffs on all imported goods that are shipped to the United States. These not only include a 10% baseline tax on all economies around the world, but alsoa litany of reciprocal tariffson some of the United States' biggest trading partners. The Trump Administration has, for example, confirmed that it will place a 104% tariff on products shipped from China and a 46% tariff on goods from Vietnam. This strategy, the U.S. government has said, is, in part, being implemented in order to encourage companies to manufacture more products in the United States.
If the Trump Administration’s tariffs remain in effect, they could havea negative impact on the video game industry at large, and on the console market in particular. As many may already know, video game consoles (and most electronic devices in general) are not built in the United States, but are instead made in countries where they are cheaper to manufacture, like China and Vietnam. Since the Trump Administration is placing high tariffs on these regions, the costs of PlayStation, Xbox, and Nintendo systems are likely to increase across the board. Out of the big three console manufacturers, though, this could impact Microsoft, and its Xbox console, more than any of the other companies.
The Trump Tariffs Will Likely Make Xbox Consoles More Expensive in the U.S.
The Xbox Series X/S Has Struggled Sales-Wise in Most Regions, Including the U.S.
Microsoft’s latest consoles, the Xbox Series X/S, were released in November 2020, the same month that Sony’s PlayStation 5 was launched. Despite the issues that the COVID-19 pandemic caused, the Xbox Series X/S initially sold quite well, but, after 2022, the system’s worldwide sales figures began to plummet. In November 2024, Xbox Series X/S console sales were down 29% year-over-year in the United States,according to Circana. PS5 sales, on the other hand, were up by 15% in the same timeframe. Even the aging Nintendo Switch managed to surpass the Xbox, with only a 3% year-over-year decline.
Since Microsoft is an American company (unlike Sony and Nintendo), the fact that its Xbox consoles are struggling this much in its home country is a big concern. With that said, the estimated sales figures for Xbox in Europe and Asia paint an even less promising picture. VGC reported earlier this year that thesales of the Xbox Series X/S in Europe(excluding the U.K.) had decreased by an astounding 48% throughout the entirety of 2024, which was considerably worse than both the PS5 and the Nintendo Switch. Meanwhile, in Japan, the Xbox consoles sold less than 500 units per week in recent months, according to Famitsu.
There Are Several Reasons as to Why Xbox Consoles Are Underperforming
Consoles usually lose their sales momentum about 4 to 5 years into their lifespans. However, the Xbox Series X/S is experiencing rapid sales declines far earlier than expected. The poor commercial performance of the console can be attributed to a multitude of different factors, including Microsoft’s limited marketing efforts for the Series X/S, the lack of sizable discounts for the systems, and a shortage of stock in many territories around the world. It’s also worth noting that selling consoles is seemingly no longer a priority for Microsoft, as it has begunshipping its flagship exclusive games to PlayStation and Nintendo platforms. Regardless, the Trump Administration’s new tariffs could still be bad for the company.
Xbox Consoles May End Up in More Trouble than the PS5 and the Switch 2
Since the United States is far and away the biggest market for the Xbox Series X/S, any potential price increases as a result of the proposed tariffs could lead to devastating effects on the system’s sales. Microsoft’s consoles are already not in very high demand, but if they were to cost up to $600-700 in the U.S., they would become much less desirable to many gamers. The PlayStation 5 andthe Nintendo Switch 2 will no doubt be impactedby the Trump Administration’s tariffs as well, but even if they struggle in the U.S., Sony and Nintendo will still have Europe and Asia to rely on, as their systems sell well in those regions. The Xbox Series X/S, however, doesn’t have that luxury, so if sales in the U.S. plummet, its commercial performance as a whole may be dire.
Xbox Series X
Microsoft’s ninth-generation console, the Xbox Series X is a powerful machine that can support 4K resolution and 60 fps, depending on the game. Released alongside the Xbox Series S, the Series X has a Custom AMD Zen 2 CPU, a Custom RDNA 2 GPU, and 16 GB of RAM.
