The Darkest Timeline – how I see the 54% tariff impacting the game industry

This is why they distract you with pronouns.

https://www.ft.com/content/b1079606-5543-4fc5-acae-2c6c84b3a...

https://home.treasury.gov/news/press-releases/jy2184

https://www.investopedia.com/biden-s-parting-gift-to-small-b...

https://bidenwhitehouse.archives.gov/briefing-room/statement...

https://www.reuters.com/sustainability/climate-energy/biden-...

https://www.epa.gov/newsreleases/biden-harris-administration...

It's giving too much. The US should not manufacture games, whether by subsidy or tariff. Full autarky is bad policy for the US.

What it does get right though is policy certainty is important. Tariffs won't bring back much manufacturing if capital thinks that they're going to be revoked, either by congress/courts or by the next administration.

It really isn't.

The U.S. can't "reward" local manufacturing (through subsidies, etc.) enough to offset the absolutely massive subsidies that China gives out like candy. (See, e.g., what China has done in the solar panel and steel spaces. Conservative estimates place the value of Chinese subsidies in those two markets alone at nearly $1 trillion dollars over the past decade.)

The point of tariffs is to eliminate the financial benefit of using lower-cost foreign providers for sourcing products for local sale.

The problem with the Trump tariffs are not that they exist, but that they are being thrown about without any thought into who or what should be subject to tariffs.

The big issue AIUI is die-cut cardboard. The vast majority of modern board games come with several sheets of it to punch out small pieces (think coins or victory point chips).

Producing these (and other game components) requires specialized machinery which isn't made in the US. So even if someone did want to set up a board game manufacturing company in the US, they would now be hit by tariffs as they bought the machines they need.

Stegmaier says that possibly games where all the components are cards will be less affected, as there are companies in the US printing playing cards.

I think the problem is mostly plastic components, especially miniatures. These requires injection molds and then manual labor to remove the parts from the sprues, clean them and glue them together (as miniatures are expected to come assembled in board games).

I think the labor cost alone makes it not possible to manufacture them in the west. But also ignoring that, consider that injection molding for miniatures can be more expensive in the west in itself. Usually because factories work on a different scale and have higher requirements for minimum order quantities, but also because they do not work usually with miniatures so they would need to adapt their tooling, expertise and know how for this specific kind of product.

Imagine a factory injection molding chairs suddenly receiving a quote for a bunch of miniatures, they can do it, but they are going to charge you for the time needed to figure out how, and for the changes in the lines.

Consider also that usually miniatures 3D files are stl or obj because they are sculpted, while the factory might work only with cad as that's the standard in manufacturing. These two are radically different and there is no easy conversion from stl to cad, which would require it being re-modeled in most cases.

Also, with a chinese factory you can expect to give them 3D files and they will take care of everything (designing molds and avoiding undercuts). I'm sure this has separate cost in the west as it involves a specialized expertise which is for sure more expensive than in China.

Btw here's a nice writeup from a person that tried to open a game factory in the USA, he doesn't even mention plastic parts though. https://www.superheumann.com/post/my-year-in-manufacturing-g...

The article and follow up comments addresses that. As an example when talking about just the box the game comes in, "the quotes I’ve gotten in the US–even from companies that specialize in making boxes–are literally almost the cost of making the entire game". He also mentions that some of the machines needed to make certain pieces don't exist in the US and would have to be imported from China, and thus you'd have to pay tariffs on the machines.

He does mention that he's started to think about fundamentally redesigning his future games in a way that makes it possible to cheaply manufacture and package them in the US.

So my question is when other countries start counter tariffs on services.

Office 365 is now 25 % more expensive.

The cost of laptops etc. is not even a rounding error in the cost of making Microsoft Office. The biggest two costs are labor and nowadays, compute for AI.

I'd say your money is best spent on lobbying.

I've never seen a corporate or government policy that doesn't allow for exemptions if the correct rings are kissed.

In fact, its often the point of a policy.

> What's remarkable is that the cost of software companies will rise dramatically simply because cost of laptops, office chairs, tables, electric cables will rise.

I think this is incredibly unremarkable. These are all fixed costs. It's variable costs, like wages and fuel, that drive everything up. If a table costs twice as much you might buy a slightly lower quality table, or you might be fine.

The USD is currently sharply devaluing, and Trump appears to be quite keen on this idea. China attempting to keep up would cause all sorts of issues.

Very few supplier industries run with a 54% margin such that the supplier can eat that and stay in business, so less orders is better than more orders that lose money on each order. For many products the margins even at the end are in the single to low double digits. This means costs go to consumers, which practically translates to inflation and decreased spending, which leads to stagnation etc. The analysis that this will stifle game makers is pretty likely true, and I see no future where the economics of that moves supply chains state side in our life time.

The US is unreliable to do trade with, so I'd simply look to diversify my customer base to not be at the whim of an erratic old man with a narcissistic personality disorder.

In the end I am pretty sure the US can't be avoided, but today the US made sure that those who had good ties to it got punished and the world will remember that. I would like to think the world might ask it self if the USD should be still be the lead currency.

The rest of the world wasn't at fault that US capitalists decided to outsource their manufacturing base to cheaper countries. I guess someone in the US got damn rich doing precisely that. Those are the people you should blame.

Additionally tarrifs cut two ways, if countries react as tou would expect them to. The EU got the biggest single market in the world, and the US just made it harder to sell their stuff there — again, beyond pure costs, reliability is an issue in itself. Why would the EU buy something from the US when products from elsewhere have less tariffs and you don't have to deal with the scenario of an erratic political leader making it up as he goes which makes it somewhat impossible to rely on a plan.

Having bad leadership is a thing that costs a nation dearly. I don't see why the rest of the world would feel inclined to carry that cost.

Reading before commenting would be helpful. It is very clearly stated in the article.

Also consider secondary effects. If you have a steel tariff anything that uses steel is more expensive. A lot of things use steel, so a lot of things get more expensive. Now thr sellers of those things have to make their stuff more expensive, at some point this increases some of the costs of a service company, e.g. energy bill, rent, the cost of computers and office stuff. A VFX company is more far removed from the steel market than a steel shop would be, but it still is not totally decoupled.

But we are not talking about a tariff on steel, we are talking about a tariff on everything.