Unfortunately, a lot of video game consoles are made in China.
"A designate expand of 25% will probably set a recent on-line recreation console out of reach for many American households who we request to be within the marketplace for a console this holiday season", the letter says.
That figure comes from a joint letter written up by Nintendo of America, Sony Interactive Entertainment, and Microsoft, where the companies comment on the proposed 25% income tariff on video game console importing. This is for three main reasons. The companies argued that the tariff would "injure" the gaming industry and its consumers, "stifle" innovation, and potentially put "thousands" of U.S. jobs in the industry at risk. Finally, it would prevent the companies from being able to innovate within the industry.
If U.S. President Trump's proposed Chinese tariffs aren't amended to exclude games consoles, the entire precious console industry could come unraveled. While there is the possibility of switching manufacture to the USA or to another country, this would still cause an increase in costs and a "significant" disruption to the supply chain. "A change in even a single supplier must be vetted carefully to mitigate risks of product quality, unreliability and consumer safety issues", it reads. When consoles are already priced at cost, or just slightly above cost, to make them as affordable to consumers as possible, any cost increase would be passed onto the consumer.
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The American video game industry, according to the letter writers previous year, generated a turnover of $ 43.4 billion, making a significant contribution to the economy.
"Console game development is already a highly competitive space; when game sales are depressed or games are canceled, major layoffs routinely result". Additionally, the industry employs more than 220,000 people and 99.7% of video game companies qualify as small businesses across the country. Nonetheless, Sony, Microsoft and Nintendo have released a joint letter on the subject, raising the fear that Tariffs would impact sales negatively. That's a price increase of up to $100 in some cases. Games would be cancelled and layoffs would certainly happen.
They also highlight the other businesses that rely on consoles, such as accessory developers and programmers. Not only that, the three companies warned that jobs in the games industry could be at risk should the tariffs be allowed to go through, and that innovation could be "stifled" should video game consoles become more expensive to purchase in the United States.
The original product list in the proposal from the administration mentions video games, gaming controllers, arcade machines, and even board games.
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According to the trio, the plans to increase import tariffs must be scrapped.
▲ Sony, Nintendo and Microsoft estimate Chinese tariffs will have a large impact on console prices.
The companies jointly ask Joseph Barloon, General Counsel of the Office of the United States Trade Representative to remove or amend the inclusion of video game consoles in current proposed tariffs.
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