Games News

Sony, Microsoft and Nintendo united against the 25% China tariff

Pinterest
Chinese flag
China

Sony, Microsoft and Nintendo aligning is not something you see every day, and the fact they did says enough about their concern over the trade dispute between the U.S. and China, and the government's proposed 25 per cent hardware tariffs.

The US's ongoing trade dispute with China had culminated in a proposal of 25 per cent tariffs on products imported from China, but the aforementioned holy console trinity think that the move would be counterproductive.

In the letter, the companies argue that the tariffs on video game consoles would not only hurt consumers, devs and consequently retailers and console manufacturers, it would put thousands of U.S. jobs at risk and inadvertently stifle innovation in the industry.

"While we appreciate the Administration's efforts to protect U.S. intellectual property and preserve U.S. high-tech leadership, the disproportionate harm caused by these tariffs to U.S. consumers and businesses will undermine—not advance—these goals", they wrote.

The three stressed that more than 96 per cent of consoles imported into the U.S. in 2018 were made in China, a development chain that took years of investments and work.

Sourcing it entirely to the US or anywhere else would, therefore, introduce additional costs, which would likely wreak havoc in the current console ecosystems and affect the profitability of the entire market segment.

"Video games are a core part of the fabric of American entertainment culture.  Two out of three households have at least one video game player and 60% of Americans play video games daily. A price increase of 25% will likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season", the letter states.

Sony, Microsoft and Nintendo also reminded that China does not make its own consoles nor are their plans to do so for a variety of reasons, which means that there is no need for tariff-based protection of their IP in China.

AltCharChinese flagPS4, Xbox One, Switch

Ultimately, the three respectfully asked that the government removes video game consoles from relevant documentation and refrain from burdening them with the tariffs. 

You can find the letter here.