The Trump administration’s current trade war against China is affecting a lot of different corners of the market. With the biggest controversy right now being the whole Huawei kerfuffle, which we here at Stuff have been covering extensively. The Huawei setback might not affect us much, but there is another industry that might be heavily affected.
In the Trump administration’s proposed 300 billion US dollars tariffs, there will be a 25% tariff on video game consoles. To the uninitiated, a tariff is a “a tax or duty to be paid on a particular class of imports or exports.” So basically, if this tariff gets passed, video game consoles will get much more expensive, which in turn would affect the price of the accessories, games, and everything else that goes into the sale of a video game console.
Gaming giants unite
In an unexpected turn of events, Sony, Microsoft, and Nintendo have worked together on a joint letter to the U.S government, with all 3 console manufacturers opposing this new bill. With 96% of all consoles being made in China, this new tariff could have a major rippling effect across the gaming industry, affecting big and small companies alike.
As the joint letter states: “Each video game console comprises dozens of complex components sourced from multiple countries. A change in even a single supplier must be vetted carefully to mitigate risks of product quality, unreliability and consumer safety issues. Tariffs would significantly disrupt our companies’ businesses and add significant costs that would depress sales of video game consoles and the games and services that drive the profitability of this market segment.”
Simply put, if Trump’s bill gets passed, the prices of the consoles will rise, which in turn will make everything else gets even more pricier. The fact that the 3 biggest console manufacturer’s are coming to oppose this tariff speaks volumes on how much this can affect the industry as a whole. One thing to note is that PC games and mobile games won’t be affected by this tariff.
How this affects Malaysian gamers
So how does it affect us here on the other side of the world? Why should Malaysians care about this? Well, it is mostly due to the fact that a lot of gaming console hardware and software sold in Malaysia base their prices on U.S prices, as well as with our reliance on English as our language to play video games on which makes us rely on U.S imports for the most part.
The least affected of these companies, in terms of their prices and presence in Malaysia is definitely Sony. With Sony Malaysia having an established presence in the region, as well as the online PlayStation Store having localised prices similar to Steam, if these tariffs get approved then the prices for Sony consoles and games wouldn’t be affected too drastically. Though if the prices of the games and consoles are already up by 25% per cent in the future, then the only grace with buying on Sony platforms is that you wouldn’t have to deal with currency rates.
This is bad news for Xbox and Nintendo players, as neither company has an official presence in Malaysia, which means Malaysian players tend to use a U.S account to play and download games. Whether it is buying games on the online stores, or getting your consoles fixed, everything will be exponentially more expensive, potentially more than 25%. Though one saving grace is Xbox’s Game Pass, which will mitigate the cost of games, but definitely not the cost of the console.
Overall, it remains to be seen whether this tariff will actually be passed. For now, as Bloomberg reports, the decisions are put on hold as the Trump-Xi summit is about to commence this Saturday, with U.S President Donald Trump and China President Xi Jin Ping to meet in regards to all these proposed tariffs. Hopefully, for the sake of all gamers around the world, these tariffs will not come to pass and the status quo will not be shaken.