25% Tariff on Game Consoles Being Considered as Part of Trump Trade Disputes

With reports already out there that the next generation of consoles could be a bit more expensive than this one, US politics certainly aren’t helping the matter. GamesDaily.biz reports that, as part of the Trump administration’s ongoing trade dispute with China, a new proposal would add a 25% tariff on “essentially all products not already covered by previous tariffs,” which catches video game consoles, controllers, and other gaming products in its net. We previously reported on tariffs that could impact the games industry at the end of last year, and there was another report in 2017 about a similar idea. Initially, the proposals were around 5-10% increases, but the escalating trade war that’s been happening with this administration has caused these numbers to soar up to 25%.

Consoles, particularly early in their release, are usually sold at a loss, with costs recouped through services, software, and establishing a strong footprint in the market. Current speculation puts the upcoming PlayStation 5 at about $499 at launch, with many saying that would still be a loss based on the tech that Sony plans to load it up with. If 25% tariffs on Chinese imports become a factor, it could have a significant impact on Sony’s pricing plans for next-gen. That’s not a cost that the company could easily eat, and it’s likely we’d see it passed on to the consumer in some form.

The ESA recently weighed in, taking a stance against imposing sweeping tariffs that would impact video game products. One major part of trade economics is surpluses and deficits. Video games are a major surplus for the American economy, so imposing tariffs on video game products would serve to hurt the American video game economy, consumers and players, and of course the various US-based publishers, developers, and other companies that are part of the industry.

Hearings are set to begin on June 17, placing these talks immediately after E3 concludes. If the proposals go through, GamesDaily reports we could see these tariffs as soon as June 24. As the video game industry winds down this generation and winds up for the next, these tariffs could have major repercussions that will reverberate into the costs of the next few years of gaming.

[Source: GamesDaily.biz]