Nintendo, Sony and Microsoft say Chinese tariffs will make game consoles pricier

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In an uncharacteristic show of camaraderie, the three major players in the video gaming console industry – Nintendo, Sony and Microsoft – have today banded together to warn the US government of the negative impact its proposed tariffs would have on the industry.

An open letter has been sent to a representative of the US government after it asked for public comment on its proposal of a 25% tariff on all goods manufactured in China.

This would include a huge range of consumer electronics, including video game consoles made by the three companies – the Sony PlayStation 4, Nintendo Switch, and Microsoft Xbox One.

The letter makes the point that “Video games are a core part of the fabric of American entertainment culture” and that “two out of three households have at least one video game player and 60% of Americans play video games daily.”

The letter goes on to claim that “a price increase of 25% will likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season. For those purchases that do go forward despite tariffs, consumers would pay $840 million more than they otherwise would have.”

The three companies state that more than 96% of all consoles in the US in 2018 were manufactured in China and, given the entrenched nature and already-tight margins of such production, any shift in this process would cause significantly increased costs of the products, which would be carried directly by US consumers.

The overarching intention of the letter is to highlight the “disproportionate harm caused by these tariffs” compared with the preservation of the US tech industry, which is what the proposed tariffs supposedly seek to address.

Higher video game console pricing isn't the only adverse affect of the tariffs the letter addresses, with the document also claiming the taxation changes would “put thousands of high-value, rewarding US jobs at risk and stifle innovation in our industry”, which in turn would negatively impact the overall US economy.

The government has yet to issue a formal response to the open letter.

source

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