The U.S.-China trade war could have some serious consequences for all businesses. One of those in the game industry, like Sony, Nintendo and Microsoft, issued a joint complaint to the U.S. Trade Representative in which they said that the tariffs on Chinese goods could cause massive disruption to the gaming industry, The Hill reports.
The joint complain from the companies read:
“While we appreciate the Administration’s efforts to protect U.S. intellectual property and preserve U.S. high-tech leadership, the disproportionate harm caused by these tariffs to U.S. consumers and businesses will undermine – not advance – these goals.”
“The video game industry makes groundbreaking, high-technology video game consoles that entertain and engage consumers of all ages and support businesses of all sizes across the United States. As makers of virtually all video game consoles in America, Microsoft, Nintendo, and SIE (Sony Interactive Entertainment) lead the growth of this dynamic and highly innovative segment of the gaming market.’’
“Economically, the video game industry contributes substantially to the U.S. economy, and its year-on-year growth is impressive. The U.S. video game industry generated total revenue $36 billion in 2017 and $43.4 billion in 2018, reflecting over 20 percent in growth. This industry directly and indirectly employes more than 220,000 people.’’
“Ninety-nine point seven percent of video game companies qualify as small businesses and can be found in each of the fifty states; many develop software for video games across the range of platforms from PCs to mobile, including the video game consoles that we manufacture, and are an integral part of the booming app economy.’’
“Although we appreciate the Administration’s goal of strengthening the protection of IP in China, video game consoles are not the focus of the Chinese practices targeted by this investigation. Video game consoles are not priorities in any Chinese industrial policies e.g. Made in China 2025. Indeed, Chinese – developed and branded video game consoles are virtually non-existent; one video game console that launched in 2016 has not been well received by the market.”
“Moreover, because margins are tight due to the nature of our business model, incentives to steal IP to make counterfeit consoles are exceptionally weak. Video game consoles are also relatively complex types of equipment, so the amount of effort and cost required to manufacture infringing or illegitimate products would not be justified by potential returns.’’