Tax break
A 90-day cooldown on Trump’s Ultimate
The SuperJoost Playlist is a weekly take on gaming, tech, and entertainment by business professor and author Joost van Dreunen.
Much of the following will have changed by the time you’re done reading it.
But I insist that what is considered the “biggest trade shock in history” by people who would know this sort of thing deserves our attention. It’s been nothing short of a historic week.
For one, I was accused of providing a “leftist talking point” by a far-right publication for arguing that the extra $50 for the Switch 2 was a Trump-imposed tax. Evidently, in addition to their “misogynistic, xenophobic, and racist” writing, such publications also have a deep understanding of video game economics.
I further realize that having Nintendo’s CEO, Doug Bowser, deny that tariffs were a consideration in the new device’s pricing carries more weight than whatever I have to say. I accept that. He’d know.
But what else can he say?
If Nintendo were to admit the existence of a Trump Tax fully, it would set off a political Bob-omb and go against the diplomatic stance the firm has taken in the past. I find it difficult to believe that Nintendo would go on record and say that, yes, in fact, they built in a financial buffer to account for current Don-made market volatility. We all saw what happened when Disney opposed Florida’s “Don't Say Gay” law in 2022 and how quickly Big Tech firms bent the knee in the wake of the election.
In 2025, corporate leadership must balance transparent market communication with diplomatic positioning in an increasingly politicized business environment. It results in an economic reality where companies facing import tariffs typically respond through some combination of absorbing costs internally (reducing margins), optimizing supply chains, and passing costs to consumers.
It should be obvious that the deviation from its existing pricing history, the stockpiling of units, the additional $10 it plans to charge for a physical copy of Mario Kart World, and the delaying of its pre-orders first in the US and then a week later also in Canada (to “align” you see) are 100% unrelated to the uncertainty created by haphazardly constructed import policies and totally the same playbook from previous launches.
Is it though?
Looking at the broader games industry reveals a few interesting trends, however. For one, Liberation Day, when Trump first announced his tariff policies, did not impact everyone active in gaming the same way.
Publishers like Take-Two Interactive and Electronic Arts, for instance, each saw a decline of around 7 percent. Their French counterpart, Ubisoft, was having a harder time, but that was likely compounded by the broader disassembly of its organization and post-launch cooldown now that Assassin’s Creed: Shadows is out. According to Circana, an industry tracker, Ubisoft’s most recent release ranked 9th and 8th in terms of US player engagement on the PlayStation and Xbox, respectively. Ubisoft is down 16 percent since April 2nd.
Next, toy makers, which broadly rely on manufacturing outside the United States, saw a more substantial share price decline. Investors are skeptical of this category’s ability to side-step US tariffs, despite having spent a considerable amount of effort in recent years trying to reorganize their supply chains. Mattel was down -28%, and Hasbro -21%.
Notably, Games Workshop is headquartered in the UK but relies on 43.8% of its total revenue in North America (23.8% in the EU and 21.7% in the United Kingdom). Its miniatures are manufactured in Nottingham, which means they face a comparatively lower rate than firms relying on Asian manufacturing, even if, according to the UK government, the new policies mean the “highest [tariffs] in a century." Games Workshop’s share price was down -8%.
Finally, it was the accessory makers that were hit hardest. Corsair and Turtle Beach, best known for their headphones, sank -34% and 31%, respectively. Physical devices and accessories are likely to suffer the most, or at least investors seem to think so.
My take: Digitalization serves as both a competitive advantage and an economic hedge against policy volatility.
To the extent that the games industry hasn’t already, current market turbulence, demand uncertainty, and willy-nilly tax threats will catalyze further digitalization. Firms that rely for a third or more of their revenues on the US market are now further motivated to circumvent import taxes by digitizing their content and its delivery.
Physical goods—games, collectibles, swag, etc.—will come at a higher premium. I expect to see a greater emphasis on digital offers from large publishers and, potentially, a further push into digital storefronts that offer low rates.
I’ve previously written about the declining share of third-party sales through the Epic Game Store and how 92% of The Witcher is now sold through digital channels. In the case of the latter, I was reminded by more than a few friends that the EGS allows third parties to facilitate their own transactions. These don’t show up in Epic’s numbers, obviously, but I’m told they’re substantial. (I will return to this as I learn more.)
Succinctly, import taxes will bolster the industry’s digitalization as physical sales now operate at thin or meaningless margins. Retailers will feel that, too, of course, but at least GameStop has already moved on to become a private equity fund trading in Bitcoin (see below).
Update. As if on cue, while writing this, Trump postponed his proposed tariffs by 90 days, sending another jolt to the global economy.
I need a tax break.
On to this week’s update.
NEWS
Can Microsoft build on Minecraft movie success?
Generating $110 million globally on its opening day and a total of $323 million, A Minecraft Movie was both expectedly successful and a welcome sigh of relief for Microsoft. The film’s success contrasts with previous entertainment adaptations.
As the industry transitions to an era of ‘games as a platform’, publishers and IP holders are hoping to establish a 'flywheel’ where momentum in one medium generates accelerating returns across interconnected channels. It suggests Microsoft is developing competency in transforming gaming intellectual property into an expansive entertainment framework that extends well beyond its core interactive product. It follows a period of aggressively acquiring content as part of its plan to build out its distribution innovations like Game Pass.
I suppose Microsoft can afford a few takes. Previously, there was the underwhelming Halo series on Paramount+. Similarly, when Fallout premiered on Amazon Prime and proved to be a surprising success, Microsoft appeared wholly unprepared to capitalize on the opportunity, lacking coordinated digital offerings or synchronized in-game events to maximize cross-platform value creation.
But this time, the firm seems to have done a better job by leveraging the franchise's 204 million monthly active users to drive theatrical attendance to stimulate new player acquisition and re-engagement with the core gaming product.
Despite mixed critical reception, A Minecraft Movie’s commercial momentum represents a strategic win for Microsoft in the increasingly competitive cross-media entertainment landscape. The company now joins competitors Nintendo (Super Mario Bros. Movie, $1.3B), Sega (Sonic series), and Sony (HBO's The Last of Us) in demonstrating how gaming intellectual property can generate substantial returns through disciplined transmedia execution—establishing multiple revenue streams while reinforcing the core franchise's cultural relevance and market position.
GameStop earmarks $1.3 billion to invest in Bitcoin
Doubling down on its already established meme stock status, the GameStop board has formally decided to invest in Bitcoin as part of the video game specialty retailer’s business plan.
In its 2024 annual report, it reads:
“On March 25, 2025 we announced that, as part of our revisions to the Investment Policy, the Board approved the addition of Bitcoin as a treasury reserve asset, whereby a portion of our cash or future debt and equity issuances may be invested in Bitcoin. We have not set a maximum amount of Bitcoin we may accumulate, and may sell any Bitcoin we may acquire.”
I mean, at this point, who cares?
GameStop managed to impress analysts with a rare operating profit for last year’s fourth quarter, despite experiencing sharply lower revenue. In part, this is the result of aggressively reducing its total number of storefronts around the world: in 2024, it closed about 1,000 retail locations and withdrew from Canada and France. The cost reductions now intersect with around $200 million in annual interest income (based on an average return of 4%) from its $4.8 billion in cash reserves it accumulated by, well, you know, taking advantage of being a meme stock. (There’s something to be said for its Spartan investor relations page, though.)
The high-brow take here is that there’s a broader investment push by large corporations into stablecoins and Bitcoin as part of an effort to build (private) blockchains to decentralize company data rather than relying on someone else’s. GameStop is historically data-rich due to its used game sales accounting and infrastructure. But I’m not convinced this is that.
GameStop’s share price jumped 17% from $25.37 to $29.65 on the news.
PLAY/PASS
Play. The GameCraft podcast, hosted by Mitch Lasky and Blake Robbins, kicked off its third season and started with an episode on industry cycles.
Pass. France's competition regulator fined Apple €150 million for implementing its App Tracking Transparency tool in a way that unfairly restricted data access for competitors while exempting its own ad network. That’s 0.04% of Apple’s 2024 revenue or the equivalent of a $25 fine for an average American household.
Play. Supercell has established Supercell Investments, which serves as the new branding for its investment division. Its efforts will concentrate on funding mobile, PC & console, and game technology projects. Even so, it already missed the opportunity to call itself Cash Royale.
UP NEXT
I’m headed to the Netherlands to restock on black licorice, see some friends, and eat as much cheese as I can before the next round of tariffs.