The Trade War between President Trump’s administration and China could soon have a vicious impact on Gamers’ wallets unless there are major last minutes changes made to the upcoming tarrifs being placed on China.
SIE, Nintendo, and Microsoft came together to write a 7-page appeal asking President Trump to remove the 25% tariff that will imposed on all imported goods from China. For the unaware, most of the chips and inwards in our favorite consoles are manufactured in China. If the tariff continues to the way it is, the three companies claim it could cost Gamers over $840 million more dollars to enjoy present and future gaming hardware.
Consumers would pay $840 million more than they otherwise would have. The video game console supply chain has developed in China over many years of investment by our companies and our partners. It would cause significant supply chain disruption to shift sourcing entirely to the United States or a third country, and it would increase costs—even beyond the cost of the proposed tariffs—on products that are already manufactured under tight margin conditions. Each video game console comprises dozens of complex components sourced from multiple countries. A change in even a single supplier must be vetted carefully to mitigate risks of product quality, unreliability and consumer safety issues. Tariffs would significantly disrupt our companies’ businesses and add significant costs that would depress sales of video game consoles and the games and services that drive the profitability of this market segment. Because of the deep interdependence of video game consoles and game software, and due to the price sensitivity of video game console purchasers, tariffs on video game consoles would not only harm our companies, consumers, and retailers, but will also disproportionately harm the thousands of small and medium-sized software and accessory developers in the United States. Thus, these tariffs would have a ripple effect of harm that extends throughout the video game ecosystem.
These tariffs would have a major trickle down effect that would impact the entire gaming industry including publishers, developers, and the rest. While it is doubtful that Trump’s administration will change anything, it’s still encouraging to see the Big 3 uniting to potentially help save the gaming industry.
With Sony and Microsoft currently researching the price for the PS5 and Next Xbox, these tarrifs could have major implications on what we could be paying for our next-gen experiences.
If you would like to read the entire document, click here to download the PDF.