If you keep up with global politics or happen to live in North America, you might have heard about recently proposed tariffs on Chinese goods by the Trump administration.
In a rare display – Nintendo, Sony and Microsoft have joined forces (in a seven-page letter) to warn the American government about the impacts this could potentially have on the video game industry – explaining how a 25 percent tariff increase would result in US consumers paying more than $840 million more for their consoles.
This letter goes on to explain how 96 percent of all video game systems were constructed in China over the past year and having to rework the supply chain to avoid these costs would likely cause significant disruptions to production.
“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.”
It's further stated how the proposed tariffs would "depress sales of video game consoles and the games and services that drive the profitability of the market" and a 25 percent increase would likely put new consoles "out of reach" for the average American family this holiday season.
At this point in time, trade talks between the United States and China are ongoing. These newly-proposed tariffs could come to a halt if significant progress is made at the G20 Summit in Osaka this weekend.