The duties that the President of the United States would like to impose on China, would lead Sony, Nintendo and Microsoft to increase the prices of their consoles
The 25% duties that President Donald Trump would like to impose on products from China could cost video game enthusiasts in America up to $840 million. That's why Nintendo, Sony and Microsoft have written a joint letter addressed to Joseph Barloon of the Commerce Department to ensure that such duties are not imposed.
According to the three companies, future generations of gaming consoles, primarily PS5 and Xbox Scarlett, could cost much more because of the duties. Since, the companies explain in the letter, the profit margins on each console are already very small for those who produce them, the only plausible hypothesis is that the duties of 25% will be downloaded almost in full on the final price paid by the buyer. 96% of the consoles sold in America, in fact, is produced in China and very often much of the hardware they contain is itself Made in China.
The letter from Sony, Nintendo and Microsoft
The three gaming electronics giants have expressed their opposition to the duties quite clearly: "While we appreciate the Administration's efforts to protect U.S. intellectual property and preserve U.S. high-tech leadership, the disproportionate harm caused to U.S. consumers and businesses by these duties will undermine, not facilitate, these goals." Thus, according to Nintendo, Microsoft and Sony, punitive tariffs on Chinese electronics will harm consumers, put jobs at risk and stifle innovation in the industry.
Google is watching
While the three console giants are lobbying Trump to ensure that the tariffs don't see the light of day, Google is in a very different position and, conversely, could benefit. If on the one hand Google has had to break off business relations with Huawei in the smartphone sector (due to the latter's inclusion in Trump's black list, which is the B side of the trade war with China), on the other hand the Mountain View company is preparing to launch its online gaming platform Stadia. Platform that, we remind you, does not require any console but can be used from PC, Mac, smartphone, tablet and even Smart TV. A price increase of 25% for next-generation consoles, therefore, could convince potential buyers to choose Google's solution instead of the latest generation of consoles from Microsoft, Nintendo or Sony.