As part of the Phase One agreement between the governments of the United States and China, tariffs proposed by President Trump, which would have added a 25% tax on electronics manufactured in China, will not go into effect. In return, the Chinese government has promised an increase in purchases from the US, in addition to addressing concerns over the handling ofAmerican intellectual property in China.
The tariffs, had they been implemented, would have very likely resulted an increase in the price of video game hardware, much of which is produced in China. Notably, this would have included upcoming consoles likeMicrosoft’s Xbox One Series X and Sony’s PlayStation 5, neither of which have been given a price yet.
RELATED:PS5 Reveal Date Hinted at By Industry Insider
In a very unusual occurrence for the competing companies, Nintendo, Microsoft, and Sony all came together to release a joint letter in opposition to the tariffs. All stated their belief that the new taxes would have a detrimental effect on the video game console market. Nintendo, was to its own extent, already preparing for the tariffs to take effect, as the company was reportedly moving its base of production forthe new Switch Liteoutside of China.
The Entertainment Software Association, or ESA, which representsthe American video game industryin United States politics, had a positive response to the Phase One agreement. In its statement, it called the outcome encouraging for the industry, believing that the tariffs would have had a negative effect on the market.
The Game Manufacturers Association however, who represents the hobby games industry including games involving cards, miniatures, and boards, is less pleased about the results. Materials used in the production of manytabletop gamesare still part of planned tariffs on China.
It’s possible that part the reason for Trump’s compromise in trade negotiations with China is the upcoming presidential election, for which he aims to gain the popularity of both manufacturers and consumers. And the video game market is one of the most heavily profitable in the entertainment industry. Regardless of reason, it appears that the video game market will remain largely unaffected by foreign policy, though board games might not get away as unscathed.
