Sony, Microsoft & Nintendo Want To Limit Production In China Due To Trade War

With signs pointing to the trade war continuing, gaming companies are looking to move production away from China.

Video game industry giants Sony, Microsoft, and Nintendo are all planning to scale back production in China as the trade war with the US continues.

The trio has joined other tech companies in their complaints regarding President Donald Trump's dispute with the Asian country but they're now seeking to limit manufacturing therein, according to Nikkei Asian Review.

The publication has indicated that the console manufacturers have joined the likes of Amazon, Dell, HP, and Google, who are all looking to curtail production in China.

“The industry consensus is to move an average of some 30 percent of production out of China depending on how important the U.S. market is,” a supply chain analyst said to Nikkei. “Everyone needs to come up with a plan. Apple is really the very last and the slowest to start formulating plans, while everyone else out there is much more aggressive.”

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via pcmag.com

Taiwan Institute of Economic Research Darson Chiu suggests the Chinese economy will have to prepare for a major impact as companies limiting production will lead to a loss of jobs and will stall economic growth. An official from the city of Chongqing - known for laptop production - has also claimed that uncertainties caused by the trade war have led to a drop in orders.

It is hoped that the G20 summit in Osaka, Japan will help soothe things between the US and China. However, economists aren't sold on the prospect.

“We think [the trade war] is going to be the big story of the next year, just as it was the big story of the last year,” Ethan Harris, an economist at Bank of America Merril Lynch told Fortune.

“Both sides need to be motivated by signs of pain in the market, in the economy, and politically,” senior economist from said bank, Aditya Bhave, explained. “With the strength of the markets and the economy, and the [Federal Reserve’s] accommodative stance, we don’t think there’s enough motivation.”

Sony and Nintendo haven't yet responded to the report but Microsoft has told Nikkei it has no plans to withdraw manufacturing from China.

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