04/10/2020

A US-China trade agreement should lower the cost of next-gen consoles. Meanwhile, the board game industry is still suffering from existing tariffs. Anxieties are still high as election season enters full swing.

In December, the United States and China reached a so-called Phase One trade agreement that suspended proposed tariffs on video game consoles indefinitely. While its not quite the comprehensive reform package that the Trump administration has been after, it does remove a significant threat to the launch of the PlayStation 5 and the Xbox Series X this holiday season. Meanwhile, those in the tabletop games industry are still suffering.
President Donald Trump first adopted his combative stance against Chinese trade policies while on the campaign trail in 2016. After his election, he went on to raise existing tariffs and create new ones. The situation came to a head last summer with the threat of 25% tariffs on some $160 billion worth of Chinese goods, including consoles. Those tariffs had the potential to increase the cost of the PS5 and Xbox Series X, which will likely be built in China this year for sale in the United States and elsewhere.
The situation prompted a rare display of solidarity among console manufacturers. In June, Microsoft, Nintendo, and Sony all signed a letter addressed to the Office of the United States Trade Representative (USTR) decrying the proposed tariffs. They said that their true cost an estimated $840 million for game consoles alone would be shifted almost entirely to American consumers. The end result, they said, would likely put a new video game console out of reach for many American families.
But, with the announcement of the Phase One agreement in December, console manufacturers appear to be out of the woods. At least for now.
USTR has suspended the tariffs on consoles until further notice, the Entertainment Software Association confirmed to Polygon last week via email. We are encouraged that the Administration suspended the implementation of tariffs on video game consoles and controllers. These tariffs would have significant implications for our industry, which boasts a trade surplus for the American economy. Tariffs will erode innovation, decrease job opportunities for American workers, and increase prices for consumers.
Meanwhile, tariffs on Chinese goods remain in place for certain materials needed to make modern tabletop games. That category has seen a remarkable renaissance in the last decade, fed in part by the growth of the crowdfunding model. The ongoing trade war continues to put creators, publishers, and manufacturers at risk.
The U.S. is maintaining 25% tariffs on approximately $250 billion of Chinese imports, which include many raw materials [needed to make tabletop games] and will likely be a factor for supplies in our industry, John Stacey, executive director of the Game Manufacturers Association (GAMA), told Polygon via email. We are working to roll these back as well as prevent the imposition of tariffs on toys and games which was paused by the Phase One agreement.
Stacey said that these increased costs have led many in the tabletop industry to explore production in Europe, Mexico, and, to a lesser extent, in the United States. Luke Crane, head of outreach and international at the Kickstarter crowdfunding platform, says that tariffs and alternative sources of manufacturing remain a hot topic in the tabletop industry.
Its a force that is beyond our control, Crane told Polygon by phone earlier this month. Weve got to kind of hope in some regard that we dodge this one.
Stacey said there were practical things that consumers could do to sway the Trump administrations policy. He recommended raising awareness with legislators in your home district about the impact these tariffs are having on the games you like to play. But, with election season in full swing, anxiety is still high.
Funny things happen during elections season, Stacey told Polygon. He should know. Stacey worked in the Ohio state legislature for more than 17 years. We used to call this the silly season because you never know whats going to happen.