The escalating conflict regarding President Donald Trump's proposed tariffs on imported goods from China has led the three main companies of the video game console market to lay down their arms and unite in order to oppose a deal that could damage their industry in the future.
The potential issues these tariffs would create for the computer hardware industry have prompted Microsoft, Nintendo, and Sony to create a joint letter that has been sent to General Counsel to the United States Trade Representative Joseph Barloon in an effort to outline the problems that the tariffs may cause.
The key pages of the letter have been uploaded to Twitter by Daniel Ahmad, but the whole document can be found on the Regulations.gov website. The contents of the letter state that the video game industry provides over thirty billion dollars to the economy and is in a state of growth. The three companies combined sold over fifteen million video games in 2018 alone and that ninety-six percent of the consoles that those games are played on were made in China. The cost of moving the production facilities to other countries would be catastrophic to the industry,
Sony, Microsoft and Nintendo have written a joint letter to oppose proposed tariffs from the Trump administration.— Daniel Ahmad (@ZhugeEX) June 26, 2019
Tariffs on video game consoles are currently set to increase by 25%.
96% of video game consoles imported to the US were from China. https://t.co/Fv10a7ST45 pic.twitter.com/6roH6sHDiw
The letter goes on to outline the achievements that video game consoles have earned out of their specific industry, with both the Nintendo Wii and the Xbox Adaptive Controller being noted for their contributions to the well-being of their fans. The letter concludes by stating that the tariffs will not stop the problem of IP protection in China and the unique business model of video game consoles means that there is little worry of counterfeit systems being sold in the region.
The proposed tariffs would hit all three console manufacturers hard over the next few years, as both Microsoft and Sony are gearing up for the release of their next consoles, with the Xbox Scarlett due to be released during the 2020 holiday season. There are also numerous reports of Nintendo preparing different variations of the Nintendo Switch in the near future, with a rumored smaller model being prepared in time for Pokémon Sword & Shield. The idea of costs being raised by up to twenty-five percent is likely a scary one for the main console manufacturers and it's no surprise that they have banded together in order to oppose the tariffs.