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Nintendo, Sony and Microsoft Rail Against Trump's Console Tariffs

Microsoft, Nintendo, and Sony — the tech companies behind popular consoles Xbox One, Switch, and PS4, respectively — have submitted a joint letter to the United States government expressing concerns over proposed tariffs that would impact manufacturing their game consoles in China. 

In the letter, dated June 17 and addressed to Joseph Barloon at the Office of the United States Trade Representative (USTR), the industry leaders explain how tariffs on video game consoles hurt consumers, developers, retailers, and manufacturers alike. The USTR’s tariffs also “risk job losses in the industry,” and “stifle innovation.”

Credit: Chip Somodevilla/Getty Images

(Image credit: Chip Somodevilla/Getty Images)

Microsoft, Nintendo, and Sony point out in the letter that in 2018 over 96 percent of video game consoles were built in China, so redirecting one hundred percent of manufacturing to the US or another country would disrupt the current supply chain and raise costs, "even beyond the cost of the proposed tariffs."

"In a single year (2018), our three companies collectively sold more than 15 million video game consoles in the United States alone. Together, we currently employ nearly 8,000 people across the United States," the letter states, additionally noting the $43 billion the video game industry generated in revenue last year.

The proposed tariffs add a 25% tax on all imports from China. Microsoft, Nintendo, and Sony say the tariffs “likely put a new video game console out of reach for many American families,” if retail prices for their signature products rise to offset the tax. 

Describing a "ripple effect," the three game publishers say that the imposed tariffs increase on consoles will hurt also the smaller software developers they collaborate with. "Our consoles have generated a vast ecosystem of small and medium-sized game developers," the letter says. "A significant number of the games played on Microsoft, Nintendo, and SIE video game consoles are not developed by our companies in-house."

Microsoft, Nintendo, and Sony are among the half a dozen tech companies that have publicly asked the current administration to excuse their products from the raise in tariffs on Chinese goods. In particular, there’s concern over tariffs being placed on popular devices before the 2019 holiday season. The USTR held the hearings on June 17, which means they can go into effect at any time.

  • Dean Thorpe
    Dude, you don't know what you are talking about. On console manufacturing there is not that profit margin to "take less profit" also nintendo and Sony aren't American companies nor have they afaik ever manufactured in the USA.
    The Us gets Thier tax from everyone who profits im sure. Do you want to be able to afford a pat or not? Do you not pay enough tax? Cos that's all it is, do you want to pay extra and have that go directly to the us gov? It's ok to say yes, I'm just asking.
    Reply
  • Dean Thorpe
    Pat =ps5 sorry.
    Also
    Oh it's the tech comps being greedy? Really? Buy American dude good for you but if you DO want Japanese and they prod in China and you don't want to pay more because bully man says so then that's ok too.
    That said either way you probably won't notice the difference (either way:read even if your gov gets its extra tax)
    Who's really being greedy?
    Reply