In the words of that Fallout’s narrator, “War. War never changes. The Romans waged war to gather slaves and wealth. Spain built an empire from its lust for gold and territory. Hitler shaped a battered Germany into an economic superpower. But war never changes.” Now, we face another war, the trade war between the US and China, and things have started to heat up!
Now, you might be asking yourself, how those the Trade War impact my gaming? Well, how about a 25% Tariff on all imported gaming, including video game consoles, gaming machines and coin-operated arcade machines from China, including board games and video games. According to the OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE:
At the direction of the President, the Trade Representative determined to take actions resulting in the imposition of an additional 25 percent duty on products of China with an annual trade value of approximately $250 billion. In particular, in accordance with the direction of the President, the Trade Representative is proposing to modify the action being taken in this investigation by taking further action in the form of an additional ad valorem duty of up to 25 percent on products of China covered in the list of 3,805 full and partial tariff subheadings set out in the Annex to this notice.
Essentially, companies like Nintendo, Sony and Microsoft are going to be hit hard with this tariff. Games are already being sold at a loss, with the exception of Nintendo striving for a break-even margin, however with a 25% tariff, this could set them back tremendously. So for example, a Nintendo Switch right now in US is retailed at $299, with the +25%, that would increase the retail price to a whopping estimated $375.99. So as you can imagine, Nintendo isn’t too happy with this new change. With them currently rumored to be working on two new version of the Switch one supposedly marketed at a cheaper price, that’s going to impact them a lot.
Also on the same both are Sony and Microsoft, got gearing up to reveal their next line of consoles soon this year. A price is a make or break deal and while some dedicated gamers will purchase these consoles at any prices, the rest of the more casual audience will most likely be hesitant to pick one up. Not to mention hat this will lead to gaming companies lowering their quality of..well everything to reduce the rise of prices thanks to the tariff.
Small start ups will find it the hardest to survive in this new changes and will likely suffer the most. This whole thing is very interesting to follow from a European stand-point. We will have to see how these gaming companies will readjust to the tariff that the US has imposed. This all just a power play from both countries to showcase their power, with China already playing the long game, even asking the people of China to join a “new Long March”!
At least nukes aren’t being thrown around, huh?
