Microsoft, Sony and Nintendo have come together and submitted a joint letter to the US government expressing their concerns about Trump’s console tariffs. The proposed tariffs will affect the cost of making the Xbox One, PS4, Nintendo Switch and all upcoming consoles that are made in China.
The letter is addressed to Joseph Barloon at the Office of the United States Trade Representative (USTR) and explains how the proposed tariffs not only affect the manufacturers of these consoles but consumers and game developers as well.
The letter mentioned the number of people that Microsoft, Sony and Nintendo have employed in the US. The following figures were shared in the letter:
In a single year (2018), our three companies collectively sold more than 15 million video game consoles in the United States alone. Together, we currently employ nearly 8,000 people across the United States.
The proposed tariffs will increase the price of gaming consoles by 25% and if that is indeed the case then a major portion of US households will no longer be able to afford consoles from Microsoft, Sony and Nintendo. The letter went on to mention the following:
Our consoles have generated a vast ecosystem of small and medium-sized game developers. A significant number of the games played on Microsoft, Nintendo, and SIE video game consoles are not developed by our companies in-house.
Console buyers are price sensitive and I do not think that either of these companies can afford to sell their consoles for a higher price. Sony and Microsoft have already sold consoles at small margins and relied on software and services to make up for it. That might not be possible if the price is increased by 25%.
Sony, Microsoft and Nintendo are just a few companies that are worried about these new tariffs. Many companies have voiced their concerns regarding these tariffs. It will be interesting to see what happens in the upcoming days and what pricing of these consoles will look like if these tariffs do take effect.
