Trump Import Tariff Hits The American Gaming Market Hard
May 15, 2019 by cassn
The Office of the U.S. Trade Representative made the announcement earlier this week that toys, board games, and dice from China will be subject to additional import tariffs of up to 25%.
Trump had, up until recently, been in intense trade negotiations with China. However, when the negotiations fell through on Friday, Trump proposed the additional tariffs be enacted.
Image BBC
The announcement is a blow to both indie and established games designers alike, and, if passed, the move would significantly increase gaming costs in the American market. Rob Daviau (Betrayal at House on the Hill, Pandemic Legacy) has stated that the tariff 'could literally end my career.'
Public hearings into the proposed tariffs will begin on 17th June 2019, allowing businesses and individuals the opportunity to have their say on specific subheadings. The tariffs could be implemented anytime after 24th June 2019. You can check out the full list of proposed tariffs here.
Let us know your thoughts in the comments below!
"The move would significantly increase gaming costs in the American market"
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It is a matter of how long this will last. If games are on the water and sailing to the US, they will not be impacted. I suspect many KS will just hold their product in China and let things blow over. I know people panic but we have no idea if this is just short term noise. The way the USA went about this is terrible but it has been a long time coming. This morning on the local US Business News when you have the far left and far right agreeing that this needed to be done you know that all sides have dug in their heels and China has just as much to loose as the USA. Sucks, but we cannot have China keep stealing IP.
I don’t know about holding things in China indefinitely. I mean, that costs money, and there’s no guarantee that this will end soon enough.
This is a case of “when elephants battle, it is the ground that loses.” Whether it is right or wrong, smaller businesses can get squashed by this.
Yeah, know what you mean but it sucks that its going hurt the hobby market since that sort of like kicking the 3 legged puppy, wouldn’t have been smarter to focus on higher demand products, like smart phones.
We need our own mills/tooling company.
Trade wars are bad for everyone, it won’t just be the US and China who are affected, all world economies will be. You don’t have to go too far back in history to see the devastating effect trade wars can have on the world’s economy.
So good news for domestic games makers. Good news for the environment. Bad news for hedge funds who rushed in to get a big old slice of the booming gaming market pie.
This may actually bring some sanity back to the games market. If we see better games, rather than $100+ games chock full of plastic bits and mediocre gameplay then all the better.
lol … except that is not how this works.
It’s what those who impose trade tariffs hope will happen.
That 100$ game chock full of plastic bits will become a 150$ game at retail.
But let’s suppose they do make the switch to local manufacturing.
All the effort spent at optimizing production in China is lost.
Time and resources need to be spent to get locals up to speed … that is assuming they can find any that have the capability to produce their product at a quality they were used to.
And to add to this … chances are they’ll pick Indian plants instead of Americans, because labour cost aren’t reduced.
Net result :
– more pollution
– higher costs
– zero benefit
The market may not bear higher prices, in which case profit margins will drop. This will get rid of private equity buying up the entire games industry and hopefully put some sense back in to game design. Quality will win out in the end.
We don’t have such a huge problem of ‘private equity buying up the game market’ though. The thing that we’re seeing right now is a few huge companies (like Asmodee) and a lot of indie game developers and small companies doing their thing.
This will hurt the big companies and small ones. The big ones are the ones most likely to be able to weather it (especially if they haven’t made any Kickstarter promises). Smaller companies- even relatively large ones for the industry- might not be able to make it work= especially if they’ve got Kickstarter stuff that’s in the works, but not on the water.
If this goes down the way it looks like it will go down, we’re going to see a rise in Kickstarters that failed to deliver (because they didn’t expect their costs to go up by 25%) and they’ll be called liars and scammers because of it.
Who do you think owns Asmodee? They didn’t just wake up one morning with a pot of money made selling games and start buying up the industry lock, stock and barrel.
Asmodee is owned by a french private equity company.
For those that are interested here’s a little more detail on the ownership situation of Asmodee, by way of an example.
Asmodee are owned by private equity firm PAI Partners. PAI Partners bought Asmodee from Eurazeo in July 2018. Eurazeo, another private equity firm, bought Asmodee in 2013. Before that Montefiore Investment, yet another private equity firm, bought a 40% share in Asmodee in 2007. These private equity firms buy and sell a whole range of different companies ( to give you an idea of the diversity of these investments: PAI Partners, also have investments in a lingerie company, a biscuit company and a roofing products company, amongst many others ) simply for profit and target growth companies. Asmodee was looking to grow in 2007, so Marc Nunès ( the Asmodee founder ) sought investment. Going from a vague memory i think i’m right in saying that the growth spirts of Asmodee have come hand in hand with a new private equity firm investing. It’s a pass the parcel game as far as i can see.
BTW, it’s easy to find this and other information on Wikipedia and on the game companies’ and private equity firms’ own websites.
Yes, Asmodee are owned by investors. My point is that their market share isn’t big enough to keep small companies from rising up through Kickstarter.
The issue is that these tariffs would be harmful to Asmodee, but it will probably be more harmful to Cephalofair, Succubus Publishing, Kingdom Death, Druid Games and Awakened Realms.
Asmodee can probably shift their approach, close down some of its developers, weather the shift, and finish with fewer games on the market, but a larger market share due to so many companies folding.
@tankkommander :
if people wanted quality they would have bought avoided those ‘cheap’ games you hate so much.
The truth is that (most) people don’t care.
Pretty shiny stuff sells.
It’s what drives the entire fashion industry … and the game/entertainment industry isn’t any different.
Quality won’t win, because those companies will be dead broke before people realise it.
Actually we already have push back within the industry. Some companies are talking about making ‘fewer, better, games’. So it seems the market saturation is clear to those with eyes to see.
@tankkommander
I’d suggest looking at any form of entertainment that reaches mainstream level of popularity.
The mass produced stuff tends to be of relatively low quality when compared to the more exclusive top tier stuff that the elitist fanboys & posers consider to be ‘good’.
However I’d argue that there aren’t that many bad games out there.
Things like Zombicide sell because the core gameplay is decent and the miniatures add a lot to the game.
GW isn’t doing the ‘model + game’ as much as they used to, but those things were more like an excuse to sell models at a discount than actual attempts at selling a game anyway.
I think that’s true to an extent, but i also suspect that a number of people just don’t realise they can get something of better quality, and/or don’t realise they are getting of worse quality. When they do realise there’s a backlash.
I’m not all that convinced that the ‘shiny’ games are low quality. Obviously, some games come with nice minis and poor rules sets, and some have good rules and bad minis, but I don’t see a general correlation between good minis and bad rules.
Sure, there are some good games with low production values, and bad games with high production values, but there are enough bad games with low production values and good games with high production values to off set any perceived inverse correlation.
There is actually no real infrastructure for producing the games we like in america. The companies that do it are all card game centric publishers. Loony labs, cheapass games.
To print settlers of catan in America took Mayfair games a decade of work to build the supply chain from scratch.
Will be interesting to see the impact this has on kickstarter as a lot of companies rely on china to make the plastic components.
Obviously it will significantly affect the games made by the likes of Cmon, Mythic and other plastic heavy games. KS stretch goals will be falling further apart to allow for the extra cost of miniatures.
As @tankkommander says, it could be good news for companies who manufacture in their own country.
And less plastic is good for the planet.
On the down side… it’s a Trump decision and they are seldom wise. It would be tragic for the nuclear apocalypse be started over a war of plastic.
If I recall correctly, China does a lot of printing for the world too, books… not just games… so the humble *paperback may go up in price.
*Paperback… for the kindle generation a paperback is like an e-reader, but you can flick through it easily and read it without worrying about the battery failing.
I agree that they will have to work on the stretch goals to mitigate this cost. On the other hand crowdfunding has allowed companies such as CMON or more soecifically Monolith to fund and sell their games while saving on intermediaries such as banks, wholesalers, distributors or even brick and mortar shops. This will probably entice several publishers to shift to a KS exclusive model.
You might be right.
Up to now, the ‘savings’ that companies have from Kickstarters have gone into promising extra minis (many of them exclusive or separate at retail) and discounts for backers.
We might enter an era in which Kickstarter games aren’t such grand productions, but also aren’t available at retail at all.
A lot of gaming stuff is printed in China, but most New York publishers print in the US. They like the quick turnaround you can get from it.
But game books are more often printed in China (RPGs, etc) and cardboard game components are also majority Chinese (so that covers most other games).
Games Workshop makes their plastics in the UK, so this would put them in a good spot. Reaper has one plastic injection machine (it makes bases in Texas) and for a number of years, they’ve been pricing out how to escalate their operations to make all Bones plastic in Texas. I wonder if this news will cause them to accelerate their plans.
Back in 2017, I went to Guangzhou on business and visited Wargames Factory. Games Workshop outsourced the design and manufacture of the injection moulds for the terrain, dice etc. to this company, and as a part of the designing process, they manufactured the first batch of each component out there (these items probably wouldn’t be sold to the public). They also made Wyrd Games and Kingdom Death plastics out there.
Actually most of Trump’s decisions have been very good for the US economically and in other areas. Particularly with regards to the border, turned out the our “real news” media was, and probably still is, keeping secrets for the “Elites” while all sorts of criminal actions where going down on the border and beyond, plus the tougher stance is better for the nations these people are leaving since we are no longer returning just the crooks which was causing a serious citizen/criminal power imbalance in those nations (think London with 30-40% percent of the population being armed gangers with guns, that is what the US’s past handling of illegal immigration was doing to Latin America as a whole).
So far the only major forces that have truly been hurt by Trump’s “seldom wise” decisions have been socialism, pro active Atheism,the Democratic party, the one world government plan, poverty, and because they have failed to report reality the mainline news media’s reputation as a source of unbiased truth, all things that are very foolish if one look at them closely. Oh, and maybe silicon valley but as a Californian I can say those punk deserve being taken down a notch or two.
As it stands all we need to do is end the selling of recyclables contracts with China and start milling plastic minis here in the states, this is an opportunity for someone if they are honest, good at math, and have the right location.
As someone who lives on that border, NO. We are far worse off trying to become an isolationist nation. Didn’t work a century ago when travel and communication took days and it is not working now when information goes around the world in seconds and people in hours. Hiding behind a wall solves nothing and makes a poorer nation.
America spent the last century destabilizing and installing brutal dictators in Latin America. We caused many of the problems people are running from now.
Yes, America did do all that in the last century. AND it was all largely seen as being a good idea at the time. For the same reasons why these “seldom wise” decisions are now being called good ideas.
It took 20 – 50 years for those decisions to prove to be bad plans, and given the same amount of time we’ll see that these current policies are likewise poorly thought out.
All we see of Trump in the UK is him being a total moron, saying something then denying it later (despite it being recorded for posterity).
He is regarded much like a spitting image puppet, a caricature of a real person.
Yeah, that’s what he looks like in the US too.
The thing is, the Republican party, and conservative pundits have spent decades promoting conspiracy theories against source of news that aren’t them. Trump was one of those pundits. While most Republican politicians have benefited from this with more subtlety, Trump has really fanned the flames.
At this point, there’s a really sizable portion of our population that believes that any information that isn’t favorable to Trump is part of a conspiracy. He has basically set himself up as the arbiter of truth for his constituents, many of whom buy into it strongly enough that no amount of fact checking- even against Trump’s own statements- can break it.
So this trade war might be very damaging to the US economy, but there will be a faction that believes that it helps the economy, and that reports otherwise are ‘fake.’
So basically… Trump is like wikipedia… there’s an element of truth in there, but anyone can change what is said, so you should check elsewhere for the real truth.
This sounds like a rubbish game, the title is just too long.
Might be like Whack-A-Mole
And all that ugly orange plastic. Ugh
Seriously, who did the character design on this crap?
‘World at war:storming the gap’ is expecting higher prices at retail as a result. They’ve said that they will absorb the cost for backers, so we can only hope they don’t run into any problems …
source :
https://www.kickstarter.com/projects/lnlp/storming-the-gap-world-at-war-85/posts/2508136?
Yeah- I’m quite certain that there will be a lot of incomplete Kickstarters that can’t absorb the costs.
Backers don’t tend to be all that understanding of things like ‘reducing the scope of the project’ or ‘asking for more money’ but those are probably the two options many companies have.
Ooh this don’t look good for anyone down the line if this run’s for a long time as so many companys use China produces for components.
Even if it runs for a short time, somebody is going to be sunk by this.
My first thought in seeing the photo was the talks of old between the US and USSR. After going through the document the specific items that would hit the market are pointed:
3926.40.00 Statuettes and other ornamental articles, of plastics
9503.00.00 Toys, including riding toys o/than bicycles, puzzles, reduced scale models
9504.90.40 Chess, checkers, backgammon, darts and o/table and parlor games played on boards of a special design and parts thereof; poker chips and dice
9504.90.60 Articles nesoi for arcade, table or parlor games & parts & access.; automatic bowling alley equipment & parts and accessories thereof
9602.00.50 Vegetable, mineral or gum materials, worked and articles of these materials
All but the last bit are pretty much straightforward and have the US hobby/gaming industry within its reach. The last one may not be obvious as it was amid a byproducts section but would be applicable to all the rare earth magnets. I didn’t find anything that jumped out that might be applicable to epoxies for things like green stuff but I don’t know the chemistry behind it to make a call.
The issue shows that there is a vast array of goods that one producer has become the monopoly over in undercutting prices offered by competitors. Quality and quantity are things that factor into the creation of games. Generally its the figures that catch our eyes on Kickstarter before we get to all the bits and bobs that we get with the boxes of new games. It might be a push to consider the manufacturing requirements of casting dies and other stuff for large quantities of minis and associated sundries here in the US.
It seems like, just as in the case of the publishing industry, there may need to be a shift in market sourcing in order to avoid the tariffs. Just like in the information from the vlogs put out by @theterraintutor there are other avenues of meeting demand for services. Its the smaller creators and indies that will be hit hardest with this as has already been pointed out.
All “Green Stuff” on the market, no matter what brand label is on it, is “Kneaditite” and is produced by Polymeric Systems- a company from Pennsylvania (US). So there isn’t a problem there.
unless you import from the US and your country has added taxes like the Americans did …
It’s a war with no winners, but then … that’s any war.
As someone who avoids buying goods made in China as much as possible for ethical reasons, it isn’t necessarily a bad thing in that respect that the cost of goods made in China will go up.
I see where you’re coming from, and I wouldn’t mind if fewer games were made in China.
25% is a massive jump, and that could really damage a lot of companies that already have plans in place. Especially for Kickstarters that are priced out well ahead of time.
Maybe it will work out if companies are given three or more years to shift their manufacturing plans. Even then, I’d expect the change to sink at least a few game companies outright.
One doesn’t simply switch manufacturers … there is a lot of know-how that gets lost when making such a switch.
And it still may not be enough to offset time, the cost of (local) labour and inefficient processes (a huge factor in reducing production cost!).
Chinese can afford to pay peanuts for their workers, because there’s no unions and few regulations to worry about.
It will hit the small companies who can’t afford to change.
This is what happens when you put a guy in charge of the economy who had managed to bankrupt more than one casino 😉
The Chinese must be so, so terrified right now…
The US government states that publishers need only move their production to the US to avoid all tariffs except that the machines that die cut cardboard and stamp out plastic parts are also made in China and are already on a ban list to be imported into the country. There are German systems but they are rarer and more costly. Once again this government has chosen a ‘fix’ without confirming that their ,solution’ is actually viable at any level of industry.
Are you saying that trump and his ‘yes men’ lackeys got it wrong?
Man, that really sucks.
They have loads of tarrifs in Brazil, so maybe we need to start running things that way. We get the games all sent to Canada or Mexico, and drive them across the boarder from there.
To me KS have 3 options
1: stop having items produced in china
2: increase buyin and SG to mitigate costs penalising ROW.
3: increasing US shipping for shipping to the US.
If they ship from China directly to ROW then they won’t have to pay the tariff.
yeah … ask Prodos to do it … 😉
New Kickstarters have options:
1- Stop manufacturing in China. With who? We don’t have a lot of non-Chinese options at the moment (and the machines you’d need to get also come from China and are heavily tarrifed).
2- This is probably where things would end up going. Kickstarter deals get worse for the funding, so the funding doesn’t accelerate, so the deal is worse than that… Kickstarter will stabilize much worse than where it is now.
3- This will cause general discontent among backers when their shipping goes from $15 to $50. Especially if some companies don’t do the same (it makes you look bad to be the only company charging $50+ for “shipping.”
In most game Kickstarters, the US is the majority of the market (approx half on average for the big ones). That’s a big market to potentially offend.
Ah… What an absolute shit show my ol country is going through. I just hope this gets over with fast and prices even out again as quickly as possible. Bad for everyone involved.
People and business’s have had almost 4 years to prepare for this it’s not as if it was a secret. It was a pretty vocal part of the campaign.
Rob Daviau has a political agenda against the President so anything he says doesn’t really mean much. His Twitter makes that pretty clear. “live in a super blue state” “Fuck you, Donald Trump” it goes on. He drives his agenda (if you have your political affiliation in your Bio then yeah you have an agenda) by making this sound worse and gains nothing by making it sound better.
Let’s not forget China is also a mass murdering, totalitarian dictatorship that will literally harvest your organs if you don’t follow their orders. If you do business there you’re basically just using slaves.
The Title is a tad misleading since the Tariff is merely proposed not actually in effect so it hasn’t actually done anything yet.
All that being said I’m against all Tariff’s (an an Austrian Economics Follower) and they’re always a bad idea.
They could have told businesses 10 years ago this would happen … and they still wouldn’t have reacted until the last minute. We’ve seen this with the recent ‘privacy’ regulations (GDPR) and we saw it when Y2K happened.
Companies aren’t eager to throw away things that work.
Especially if they can transfer that cost to the consumers who don’t have a viable alternative.
And then there’s the fact that these things take time and lots of meetings.
You don’t waste resources on something that might change in a few months anyway, because by that time people are used to the new prices or the tariffs have dropped.
I hope these hearings fall through. Nobody wins with this.
He’s meant to be visiting Ireland soon and will probably be in my county due to the fact he owns the Doonbeg Golf Resort. The joys of it…
This won’t get China to respect IP.
(The only thing proven to work is to build factories in China. look at what it took for LEGO to make any headway against Lepin)
This won’t magically make the supply chain to produce games in America appear.
This is a tax that is being justified by preying on fear, xenophobia, and ignorance.
What will the tax even pay for? What are we getting?
Yeah, that’s exactly how you not only get your IP, but also all your technological know-how stolen! China is a malicious actor, a leech profiteering from the free market by undercutting and theft. It’s easy to outplay a free market and destroy industries when you’re a dictatorship. Fuck China, and fuck their cheap garbage. Trump is doing what that weakling Obama should have done years ago.
Obama did do it and it was a disaster then. He put a tax on imported tires and it cost us far more money and jobs then it provided.
A tax on imported tires. I can still feel the Chinese trembling from fear. Trump has paved the way by lowering taxes, which gives incentive to rebuild industry and enables the people to shoulder the higher prices for the time being. Until production moves back, people will survive this stuff being more expensive. Nobody will die from it.
This whole industry is one duck fart away from calamity.
Consumers will be fine
Everyone making a living on games is screwed
Publishers are facing the most turbulent market ever. No one knows how much to print as your sales for a title can die entirely without warning.
Distributors are in the even tougher position of having the least margin but the greatest exposure.
Stores are also having to deal with competition from online retailers with low overhead.
The major impact to consumers is product availability. You know why hot products go out of stock all the time? All those things I mentioned make placing deep bets on specific products very dangerous.
I’m not arguing with you. These are realities I’m presenting largely for the benefit of people reading this conversation. You appear to be a lost cause.
“This whole industry is one duck fart away from calamity.”
Yes, and no. The established big brands will be fine. Some small indies might crumble, but they will reappear after a period of consolidation. Other small brands are already producing locally and will not be affected.
“Everyone making a living on games is screwed”
That’s absolute nonsense. Maybe brands like CMON and other China plastics sellers will have to cut down a bit, but the majority of people will continue on as before.
“Publishers are facing the most turbulent market ever. No one knows how much to print as your sales for a title can die entirely without warning.”
Has nothing to do with tariffs. Even less to do with Trump.
“Distributors are in the even tougher position of having the least margin but the greatest exposure.”
Ok, so?
“Stores are also having to deal with competition from online retailers with low overhead.” Yes. That has what exactly to do with tariffs on Chinese crap?
“The major impact to consumers is product availability. You know why hot products go out of stock all the time? All those things I mentioned make placing deep bets on specific products very dangerous.”
Gee, I wonder how anyone could ever have a successful business before China flooded the market with their stolen, cheap garbage.
“I’m not arguing with you.”
No, you’re really not. For that you would have to present arguments. You’re just contrarian because Orange Man Bad. All the things you listed have nothing to do with the imposed tariffs.
“These are realities I’m presenting”
These have always been the realities of a free market.
“You appear to be a lost cause.”
Have a look in the mirror buddy. You’re projecting.
First off not a fan of Tariff’s.
“This whole industry is one duck fart away from calamity.”
It’s not relax. We’re sitting maybe 5 years away from the 3D Printing Revolution this industry is far from dead.
“Everyone making a living on games is screwed”
Why? They’ve had almost 4 Years to prepare for this, it’s not Like President Trump has kept his desire t put Tariff’s on China a secret. People have had a long time to get ready.
“Stores are also having to deal with competition from online retailers with low overhead.”
Has nothing to do with Tariff’s. If people voluntarily choose to support online rather than local stores then the market will get the message that those types of stores aren’t what people are after and make a change. The Community is holding a referendum on Brick and Mortar vs Online and it’s got nothing to do with Tariff’s.
Also if we start to favour the Brick adn Mortar then the online retailers will go away and people will say how terrible it is that retailers are going out of business. It’s going to happen, one side will eventually come out on top we just have to help make the decision about which it will be by voting with our wallets.
As for availability that’s happening now let alone with Tariff’s and it’s a sign of a healthy hobby rather than one a “Duck’s Fart” away from death. GW constantly underestimate demand for their stuff.
After a lengthy think about all the points presented so far and getting to this pot I think that you’re right in the 3D revolution. Right now we’re seeing the sad reality that manufacturers of physical products are going to be hurt in general for games in the same manner when digital impact hit other media. I’ve wondered about it and considered the upcoming stars for sculpting won’t have real names but handles. Digital sculptors will take up the slack of artisanship from the physical sculptors. Small companies will support the manual creators and it will be the same for brick and mortar. The digital world is here and physical reality actually costs something. You’re buying that $20 skin for online characters or the $80 special edition tank package with premium bells and whistles…. what’s there to show for the purchase when the power is out?
Now with the creation of material goods it comes down to cost of making something. Look at our own OTT crew and see the direct change this has affected. The STL creators for KS will make a killing for their work that people think is cool. There is atleast one noted person on Shapeways that gives away his designs because of the love for gaming. These are ‘interesting times’ we live in. (pardon the ironic pun but we lack @sundancer and his wonderful wit)
Money raised from tariffs is directed into the US Treasury Dept, where it goes into a non-transparent fund which has no regulations on what it may or may not be spent on.
This structure is not new, it goes back to when tariffs were first established as a legal foreign policy technique.
I bring up the many problems of the industry to show that The whole thing is a house of cards at the moment.
Putting more stress into it could be disastrous for people who earn a living.
Almost all the games in the USA are manufactured in China.
You didn’t even know Obama had used tariffs and accused him of being weak. Upon learning that he did you moved the goal post saying that tires weren’t enough. That he should have taken a more destructive action. You are no longer reasoning based on information but bias. That’s why you are a lost cause in terms of an argument.
I guess I never realized that the huge piles of unassembled and unpainted minis I have were really stockpiled supplies in case of government siege.
That’s a fantastic excuse… anyone getting grief from the wife about how much unpainted plastic they have around the house should use it.
“It’s an investment…” or “They’re collectibles” and “The price will go through roof any time soon!”
damn it … you’re on to something.
Kickstarters are even better investments now that the prices at retail are going to be higher too.
Now you can say that when a Kickstarter fulfillment date gets pushed back by (another) year that they are just trying project delivery past the tariff repeal date. 😉
Apart from maybe rulebooks I don’t think I will be affected by this. It’s still a shame though. I do think that most of the acrylic paint manufacturers are based in China
I do not think that this is true, but some of the supplies might come from China, but they really come from all over the world. And that’s just a raw materials thing.
The paints used in P3 are produced in the UK. I believe that Games Workshop also use a UK manufacturer (and if this negatively impacts them, they can probably just switch to one of their old manufacturers).
Reaper paints are made in the US at Reaper headquarters in Texas.
I’m actually not sure where Vallejo is based. I’ve had the impression that they were in the US.
I’m less certain about some of the smaller lines of hobby paint, but I’ve never seen a “made in China” label on any of them.
On the other hand, I’d bet that a lot of craft store paints are made in China.