by Alleef Ashaari in
News

Something unprecedented has happened. The big three in video games; namely Sony, Microsoft, and Nintendo have actually united and banded together for a singular purpose, and that is to counter the United States government’s proposal to increase tariffs on goods imported from China.

In its ongoing trade war with China, the US administration under Donald Trump recently proposed $300 billion in tariffs, or taxes on foreign goods, on most consumer goods, and this includes a whopping 25 percent tariff on video game consoles (PS4, Xbox One, Nintendo Switch, etc).

In the joint letter sent by three companies to the U.S. government, they argue that 96 percent of video game consoles imported by the U.S. are actually manufactured in China due in part to the custom hardware that can’t be easily obtained anywhere else in the world.

Here’s part of their argument against the tariff:

“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.”

While the companies don’t exactly mention how much more consumers will have to pay if the 25 percent tariff is approved, they do argue about how the increased costs will negatively affect both larger and smaller companies in the games industry.

“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.”

It looks like the argument present by the three companies are more focused on how the tariff will impact the entire games industry and the business it contains, instead of how it will affect consumers who will likely have to pay a lot more than they currently do (which is still a grossly large number even without the additional tariffs).

According to Kotaku, it’s still unconfirmed when or even if the 25 percent tariffs on goods will be implemented, especially since the U.S. and China are still in the midst of ongoing discussions.

Here’s hoping that consumers don’t have to take the brunt of the effects, whatever the decision turns out to be. The games industry is already filled with an excessive amount of spending, due to the questionable and exploitable nature of content like loot boxes and microtransactions.


 

Aspiring writer. Born in Amsterdam, raised in Malaysia. Comics are my passion. A gamer and science fiction enthusiast. PSN: AlleefAshaari
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