Video Game Industry

Tariffs are not free money for corporations

Many companies had Trump's tariffs refunded when they were ruled illegal. Most aren't giving them back to their customers. That's wrong.
Parallax Abstraction 5 min read
Tariffs are not free money for corporations
He and Wario are related so he's got a little bit in him.
Tariffs are not free money for corporations
He and Wario are related so he's got a little bit in him.
There are tariff refund disputes and lawsuits involving many companies at the moment but I'm going to focus on Nintendo here because a) Video games and b) Nintendo and similar companies are in a position to address this in a more effective way than some others.

Right from the moment Dimentia Donald introduced his tariffs and threw the world economy into chaos, everyone knew they were illegal. He isn't allowed to impose them without the approval of Congress because tariffs are a tax and only congress has the power to tax. But, since sitting Republicans are all amoral, self-serving cowards, no one attempted to stop him until the Supreme Court took their tongues out of his ass for once and ruled the $118 billion in illegal taxes that were collected to be just that, requiring that refunds be issued to the companies that paid them. That hasn't stopped him and his sycophants continuing to try even more ridiculous (and still illegal) ways to reinstate them but I digress.

The question on everyone's mind since is, what about us consumers since we overwhelmingly were the ones these costs were trickled down to? Where are our refunds? Do I even need to answer that for you?

Nintendo is one of over 100 companies that immediately sued the US government after the ruling dropped to make sure they got refunded, which fair enough. But most aren't doing that to fight for their customer's. No, they've instead decided that the refunds should be treated as a special windfall, boosting their profits while the people who really paid the price get shafted. Again.

And that's fucking bullshit!

I've been a huge fan of Nintendo since childhood. I've owned every one of their consoles and handhelds except the N64 (I was PC only that generation) and despite some of the company's archaic positions on things like emulation, homebrew and unofficial tournaments, they are still some of the finest purveyors of the gaming artform to have ever existed. Their hardware and software are good quality by and large, as is their support and they are fairly friendly as a company to consumers in general.

I say all that to preface my fury at the straight up thievery at play here. The company that charged $10 for a fucking Switch 2 tutorial is trying to keep all of the tariffs we paid for themselves.

A group of customers has filed a class-action lawsuit against this and Nintendo's response is that when they charged higher prices due to the tariffs, customers agreed to those prices when they chose to go through with their purchases. Therefore, they aren't entitled to a refund because they got what they agreed to.

According to episode 248 of Law and Chaos, Nintendo will most likely triumph in the case and if you look strictly at the surface of their arguments, you can see why. They didn't introduce the tariffs and when they raised prices due to them, it was clear to most people what was happening and if you really wanted a Switch 2 and paid the higher price, you signalled you were cool with that. Indeed, I bought my Switch 2 before the price increase because I knew it was coming. Video games are a luxury and anyone who didn't want to subsidize Dimentia Don's trade war could have waited.

Legally, that may be correct. Morally, it's something else entirely.

Make no mistake, Nintendo knows exactly how much tariff revenue they've taken in, probably down to the cent. Any business larger than a mom and pop shop has an accounting system that keeps meticulous track of such things. When the tariffs were quashed, Nintendo's finance people were able to print out a report in minutes that told them exactly how much to sue the government for. Everyone who wasn't in the MAGA cult knew the tariffs were illegal and any smart company should have--and most likely did--kept what they collected accounted for in a separate bucket until the dust had settled. It wasn't being booked as profit because it wasn't profit. Now that they got their refunds, they suddenly want to convert it to profit after the fact and that is wrong.

Nintendo is massively profitable and has been for nearly its entire 136 year life, running a loss for only 10 non-consecutive quarters ever, mostly in the Wii U era. They don't need this money and while I didn't expect them to just eat the tariffs, they could have and still been profitable, just less so.

This money should be returned to their customer base but note my phrasing there. Nintendo doesn't know the name, address and credit card and/or banking info of everyone who bought tariffed hardware. Most of it was sold to distributors, who then sold them to retailers who then sold it to customers. Unless you registered your hardware with Nintendo, they wouldn't know who you are and even then, they wouldn't know if your purchase price included tariffs. Obtaining that info from their retail partners would be an insane undertaking, especially since many can't or won't disclose that information, nor can they verify its current accuracy. I'm not unreasonable and wouldn't expect any company to take that on, especially when they had no say in the tariffs to begin with.

However, what Nintendo and other companies of their ilk could do instead is take the tariff proceeds--and maybe a bit extra if they want to be generous--and use them to fund something that gives back to their customers as a whole. This would be both so they aren't keeping money they didn't earn and also as a gesture to their fans for stepping up and paying higher prices in a cost of living crisis to keep supporting them.

Give every eShop account some store credit. Run a sale on their games that are historically rarely discounted. Extend everyone's warranty a year. Hell, even just commit to donating the money to a gaming-focused charity, which they could then use as a tax write-off! Those are just off the top of my head. There are myriad ways they could give back and it would win them far more good will than the relatively small tariff windfall is worth. Instead, Nintendo sued the government to go "That money wasn't yours to take!" and then turned around and told their customers saying the same thing to pound sand and just keep it for their shareholders?

No, fuck that!

Their fans are what made them the behemoth they are now. Their fans are what got them through the failures of the GameCube, Wii U and initially, the 3DS. Their fans are one of the most rabid, obnoxious fanbases in all of video games because they always thought Nintendo had their backs. There's a whole other discussion about how gaming companies covet these parasocial relationships but I digress again.

The point is, Nintendo and their shareholders don't need this cash and it's not even that much to them but not since perhaps 2008 have their fans needed it more. Turning Trump's illegal tariffs around into a solid for their customers is a dead easy layup right in front of them. Instead, they're choosing to spit in their faces, keep the money for themselves and not even lower their hardware prices but in fact raising them since, twice.

Stop treating corporations like they care about you. Nintendo and their co-conspirators may be legally allowed to do this, but legal doesn't mean right. Consumers have more power than anyone when we actually sacrifice a little bit to exercise it. If you treat Nintendo as if nothing's changed for you in light of this, you've told them you're fine with them screwing you. Don't let them.

Nintendo, you can and should do better. We deserve it.

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Geek Bravado

The hobby blog of Parallax Abstraction where he posts musings on various topics, mostly gaming and tech.

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