The Trump administration’s trade war is starting to impact the gaming industry. In May, the US imposed tariffs against China to the tune of $250 billion worth of Chinese products. These could be increased. Sony CFO Hiroki Totoki says that the increase might force Sony to hike the price of its products. This would include the PlayStation 5.
Hiroki Totoki had this to say about Trump’s threat of imposing around $300 billion worth of tariffs on products including gaming products.
We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy.
He said that the company had still not decided how they would deal with the increased costs. But shifting the costs on the customers was one possibility. Most gaming consoles are already sold at slim profit margins. Sony and other companies do this because they expect to earn from services e.t.c.
However, the tariffs will obviously upset this system. And increasing the price for the PlayStation 5 could prove to be disastrous for Sony. The PlayStation 5 price for pre-orders is already being hailed as absurd. It’s too late for Sony to shift production so that the production price for PlayStation 5 won’t be affected by the tariffs.
Does this mean that Trump is setting up the gaming industry for failure? The three giants of the gaming industry, Nintendo, Sony, and Microsoft already sent a joint letter to the US government back in June. It implored the Trump administration not to impose the tariffs.
If Trump continues down this path, it could prove to be disastrous for the gaming community. We are not just talking about the PlayStation 5 price being increased.
In a world where China will soon have the most gamers in the world, these increased tariffs might make gaming unaffordable for a lot of them. Specifically, games from the U.S. This would mean that with the lack of capital to fuel the industry, a lot of game development houses will have to shut down.
Other than that, the production costs that the companies will have to bear will have to be adjusted somewhere. So expect to see a rise in the price of Xbox Scarlett and PlayStation 5 if Trump imposes the tariffs.