Reply To: US tariffs and trade woes for gaming

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The tariffs have both a direct and non direct impact on the tabletop industry. The direct cost is a 10% tariff on goods coming into the largest single country market the USA. In the short term the larger companies are likely to take they hit but when the next round of price increases come around they will grow to reflect it.

Companies that produce goods in China and a lot of card and printed books come from that country are going to be hit with a 145% tariff. China is vastly cheaper to print goods in compared to the rest of the world and the key is the volume and being setup for it. It is simply not possible in the short term to flick a switch and move that production. A lot of goods are made in advance often months but what we will see is products stopped, plans put on hold until some sort of deal can be made.

Some companies such as Catalyst who make BattleTech I understand have most the minis made in China. For those companies and a lot of board games are really going to feel the impact. At a 145% rate it simply is not economical possible to import goods and sell them. Those companies are likely to stop delivery and route stock to Europe and other countries to sell it.

In the long term it will be a lot of waiting, cancelled projects and the move to smaller games. We are likely to see from board games more focus on the 40 dollar games and a lot less of the 150 dollar ones. The shift will also be more to digital elements less rule books more PDF, STL for 3D printing rather than mini production. Boards will have to pivot quite a bit if the trade war is long term.

Indirect costs

Indirect costs from tariffs act as a tax on those countries. The current rate of “tax” on the American people is the highest single tax increase in history. It is expected to amount to between 4,000 to 6,000 dollar spending increase for the average American family. The direct result is spending will reduce and we have seen the impact on consumer confidence already which results in a need to save money rather than spend. With the tabletop gaming being a luxury product it is one that will face a large decline. The impact of that is likely to be global the effects in the USA are likely to impact other countries consumer patterns as well because the future is so uncertain.

The larger companies will be impacted but are often in good fiscal positions to weather the storm or switch production to limit the impact. For smaller companies the problems are very real the capital needed to bring production in country are massive and beyond them. We might see increase in American production but even so that production often requires imports from other countries. Costs and prices will go up even with local production.

Advice

If you have a game or set of minis that you have always wanted my advice is buy them now. Prices are only likely to go up and by quite a margin it does not appear this trade war is going to end any time soon. We may see companies trying to dump stock that was bound for the USA on other markets such as Europe but I don’t really expect that to affect prices to much.

Take care with kick-starters. A lot of kick starters rely on China for production and the USA is the largest market for those goods. We have to be blunt that a lot of the smaller companies that use kick-starter might not survive this market. Investing money into 2-3 year projects at this point come at a much higher risk. That is also true for current kick starters expect some to go under and others to face shipping delays.

Questions

Does anyone else foresee that the second-hand market for games will go up?

Maybe some increase. While demand may increase short term the effects on consumer spending will likely kick in soon so less people looking to make a purchase. I think the second-hand market will rise with inflation but I would not to looking to buy load of games to flip them on e-bay later.

How hard will the summer be for the big game conventions?

I don’t think it will be. Conventions are largely internal events to countries and companies would have already planned and been ready for them. I think we will see more of an impact later in the year. Companies would now typically start order Xmas production lines that will the biggest impact we will see this year and next.

Does there look to be a better future for Euro manufactured games?

Not really. The USA is such a big market for all companies and it is the over all impact due to tariffs will hurt them. It is possible given an economic decline in China we see a large drop in production it becomes cheaper in China. Could we see a company making a product in China cheap only to be sold outside of the USA I doubt it.

Is this fuel for the indies, minis ambivalent games and 3D printing or more profit for the decentralized model of Steamforged?

I think this market will increase for games that reduce the demand on China for production. We will see a rise for 40 Dollar basic smaller games certainly. Personally I think 3D printing is still too small a market from the home consumer aspect to really make an impact in the short term. While companies might look at internal production more such as siocasting printers to me the technology for 3D printing really does not scale up well for mass production. The cost and bother, failure rate for larger companies the technology we have at home is just not suitable. I don’t see companies wanted to invest in production with so much uncertainy in the market place.