Sony, Microsoft, and Nintendo Release Joint Letter To Prevent Trump Video Game Tarriffs
As long as the video game has been commercially viable for business, its biggest companies have always held a strong spirit of competition. Those that grew up in the 90s can easily remember the great console war between the SNES and the Sega Genesis. Nowadays, that spirit lives on in the rivalry between the PS4, Xbox One, and Nintendo Switch. Recently, a potentially bigger threat arose when it was revealed that video game tariffs could be included as part of tariffs lobbied against China by the Trump administration. Now, Sony, Microsoft and Nintendo have penned a joint letter requesting for such tariffs to not include video game consoles.
The letter by the big three was recently released on DocumentCloud for the Trump administration to see. In the letter, Sony, Nintendo, and Microsoft jointly criticize the proposed tariff on video game consoles manufactured in China. Their argument believes that the tariffs would harm all parties involved with the creation and sale of game consoles in the US, risk the loss of thousands of US jobs and damage the amount of innovation utilized in the industry.
While Nintendo and Sony are largely Japanese companies, the letter gives a reminder that these companies (and Microsoft) all have a significant amount of US employees whose jobs could be threatened if the tariffs cause the companies to suffer financially. The tariffs could also negatively affect retailers, who made revenue of over $40 million in 2018 alone. The letter also posits that the game industry mostly relies on Chinese manufacturers, and that to restructure production elsewhere would be quite difficult to achieve, even in the United States. As the letter reads:
“In 2018, over 96% of video game consoles imported into the United States were made in China. 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. Each video game console comprises dozens of complex components sourced from multiple countries. A change in even a single supplier must be vetted carefully to mitigate risks of product quality, unreliability and consumer safety issues.”
Other arguments made by the big three include innovation potentially being stifled by the tariffs, referencing Xbox’s adaptive controller and the Wii motion controller as beneficial to those who normally would not play video games for therapeutic activity, such as veterans, the disabled, or the elderly. The letter’s final argument also posits that the tariffs would not effectively protect Americans IPs as they were intended.
This is quite interesting to see Nintendo, Sony, and Microsoft all work together to combat the possible video game tariffs. No matter which side of the political spectrum you fall, tariffs would most likely harm consumers and the industry at large, especially with new consoles from Xbox and Sony on the horizon.
Do you think this letter will prevent video game tariffs? Let us know in the comments below! Be sure to stay tuned for the latest video game news, such as the free games for PlayStation Plus subscribers in July 2019, here on Don’t Feed the Gamers! Follow us on Twitter to see our updates the minute they go live!
Cory Lara1081 Posts
A royally radical and totally tubular 90s kid, Cory has a passion for all things nerdy, particularly gaming and nostalgia. While an accountant by day, he strives to be as creative and humorous as possible in his free time, be it here writing on Don't Feed the Gamers, or making dumb satirical posts on his Twitter, Youtube, Facebook and Instagram accounts.