Today it was announced that the three big video game companies, Nintendo, Microsoft and Sony, sent a joint letter to the Government of Donald Trump to call for the trade war against China to be stopped, as the new tariffs “would hurt consumers, endanger jobs and stifle innovation.”
In the letter addressed to the Office of the United States Trade Representative, the three companies join forces to explain to the US Government that these tariffs will dramatically harm the video game industry and its entire workforce, as well as cause an increase in the price of consoles, which will end up affecting US users.
It is estimated, at least, a 25% increase in the price of consoles
In the seven-page letter, it is explained that during 2018 96% of all video game consoles were made in China. Therefore, its entire supply chain would have to be reconfigured to avoid the new costs and comply with the rules, something that “would be immeasurably damaging to the sector.”
“The video game console supply chain has developed in China over many years of investment by our companies and partners. Changing this would cause significant disruption within the supply chain by moving everything to the United States. or to a third country, plus it would increase the costs – even beyond the cost of the proposed tariffs – of products that are already manufactured under tight-margin conditions. “
Nintendo, Microsoft and Sony claim that the tariffs would cause US consumers to pay at least $ 840 million more for consoles, something that would be a “disproportionate damage” and that would go against what the US Government affirms that it is pursuing with all this, they affirm in the letter.
“The new tariffs would significantly disrupt our companies’ business and add significant costs that would reduce sales of video game consoles, games and services that drive profitability in this market segment.”
In addition, the three companies mention that not only would their businesses and consumers be harmed, but also the thousands of small and medium-sized software developers and accessory manufacturers in the United States. And it would be about “a domino effect” that would spread throughout the great video game ecosystem.
Everything will be determined this weekend
As part of these arguments, we have already seen how companies such as Apple, Dell, HP, Intel, Microsoft, Walmart, Keurig Dr Pepper and Dollar Tree are also putting pressure on the Trump administration to abandon plans to impose tariffs of up to 25% on products made in China.
Right now eyes are on Japan, as the G20 Summit will take place over the weekend, where the United States and China are expected to resume negotiations on this delicate trade issue.