Next-gen consoles to get more expensive as US considers 25% tariff hike on Chinese goods

Humza

Posts: 669   +159
Staff member

It was only a matter of time for gaming to be affected by the current trade war between US and China. As Microsoft and Sony prep for their next console update cycle, the Trump administration has released a list of Chinese goods including "video game consoles and machines" to face up to a 25% tax increase.

The tariff hike not only targets consoles but gaming as a hobby in general. Tabletop and board games such as playing cards, chess, checkers and darts are also part of the list. Other gaming items in the published list include "Coin- or token-operated games for arcade, table or parlor" and "Game machines (o/than coin- or token-operated) and parts and accessories"

The Entertainment Software Agency (ESA), the organization which lobbies for the video game industry, weighed in on this development. "The video game industry boasts a trade surplus for the American economy," it wrote in an email to GameDaily. "Tariffs will hurt the American economy, its industries, and its consumers."

The tariff comes at a critical time for the game industry when both Microsoft and Sony are likely to release successors of their current-gen consoles by 2020. While both the Xbox and PlayStation are sold at a loss, both companies rely on software to lock gamers in their ecosystem of services, subscriptions and game exclusives that cover up for the cost of hardware.

Owing to technology advancements, the launch price for next-gen consoles will most likely be higher than current models. Rumored to be $499 for the upcoming PlayStation, this new tariff may further increase the "appealing" price promised by Sony.

The USTR will see the public response in regards to the proposed tariff and a deadline of June 17 has been set for consideration with the tariff going into effect soon afterwards.

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amstech

Posts: 2,643   +1,801
Not a metaphorical comparison as this article relates to global commerce and politics, but I remember the PS3 being $600 at release, and many folks paying $1000-$2000 online or from other trade avenues during initial launch. Sony needed to sell them to break even to make up for that Cell processor (what a wild chip the PS3 has) and some other things, which actually had good power but was hard to utilize.
Untapped is right.
https://gamingbolt.com/the-untapped...processor-and-how-naughty-dog-tamed-the-beast
 

Uncle Al

Posts: 7,101   +5,459
I would not be surprised to see (if they are not already in place) 3rd and 4th party marketers from other countries buying up the Chinese made systems and selling them at 1/2 the cost of the marked up versions from China (not half price but reduced by 1/2 from the tariff markup). Over the years this has happened frequently, is perfectly legal, and beats the system until somebody catches it and re-writes the Tariff to include them .....
 

QuantumPhysics

Posts: 2,904   +2,656
If the price is too high, the market won't bear it. That's a simple rule of economics.

I bought an Xbox One Day One edition at $500 and refused to go back out and buy an Xbox One X for the same price. I never bought a PS4.

People will just wait till prices decrease and then they'll buy.

OR - the companies will release the consoles at a loss and try to make up for that loss with licensing fees over time.
 

QuantumPhysics

Posts: 2,904   +2,656
Honestly I would gladly pay more to have production done in the US, by Americans.

Corporations took American factories to countries they could use slave labor and then convinced Americans that American products were poor. The few remaining American factories were bought up and driven into failure.

There is no reason why 1/3rd of America's money should be leaving to Asia.
 
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adisoftcafe

Posts: 49   +29
Honestly I would gladly pay more to have production done in the US, by Americans.

Corporations took American factories to countries they could use slave labor and then convinced Americans that American products were poor. The few remaining American factories were bought up and driven into failure.

There is no reason why 1/3rd of America's money should be leaving to Asia.

You’re saying : American Corporations took factories to China? Well...
 

QuantumPhysics

Posts: 2,904   +2,656
You’re saying : American Corporations took factories to China? Well...
#1 China's currency is artifically held low at 6.9 Yuan to $1

When I lived in China, it was 8.277 Yuan to $1.

China keeping their currency artifically low ensures that it's more profitable for companies to produce in China using their children as slave labor than it is to produce domestically.

Trump is right about that - but the trade war is only gonna mean suffering for American pockets in the short term.
 

tkabou

Posts: 118   +135
These days, people will pay any price for any thing - the rest, will just wait it out for a sale or some holiday discount, or save up the cash a while longer. (Examples include the +$1K cell phones, GPUs, etc).
 

QuantumPhysics

Posts: 2,904   +2,656
These days, people will pay any price for any thing - the rest, will just wait it out for a sale or some holiday discount, or save up the cash a while longer. (Examples include the +$1K cell phones, GPUs, etc).

I'm gonna wait for the 1TB iPhone before I upgrade from my 512GB XS MAX.
 

ghostf1re

Posts: 414   +265
If consoles are really going to get a big price tag because of this, people may as well start just buying PC's for similar prices and much more performance.
 
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QuantumPhysics

Posts: 2,904   +2,656
If consoles are really going to get a big price tag because of this, people may as well start just buying PC's for similar prices and much more performance.

Even if you added another $100 to PS4 or Xbox One X... it still wouldn't come close to the cost of a typical high end GPU ( 2070, 2080 or 2080Ti).

PC gaming is considerably more expensive.
 

Capaill

Posts: 1,200   +737
If consoles are really going to get a big price tag because of this, people may as well start just buying PC's for similar prices and much more performance.
Well, I presume the cost of computer components will go up as well. From what I can find online, motherboards and GPUs will be hardest hit. Even if some components (like RAM and SSDs) are made in Taiwan, I wouldn't rely on that staying "not Chinese" forever.
 

loki1944

Posts: 369   +221
Even if you added another $100 to PS4 or Xbox One X... it still wouldn't come close to the cost of a typical high end GPU ( 2070, 2080 or 2080Ti).

PC gaming is considerably more expensive.
Thing is that a $500-$600 pc can have great performance and retain the freedom of action for settings/mods/graphics that consoles do not have outside of relatively few and stovepiped mods. With that baseline pc, you upgrade the GPU every 4 or so years for $200-$300 and you are g2g. High end pc gaming is nowhere near representative of the average pc gamer, steam hardware survey attests to that pretty plainly.
 
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QuantumPhysics

Posts: 2,904   +2,656
Steam shows the majority of those registered have a GTX 1060.

On its own, a 1060 is still over $250.

A PC Gamer still needs a CPU, motherboard, OS, HDD, PSU...MONITOR...

Most gaming-grade computers surpass $600
 
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Lounds

Posts: 447   +335
More expensive in the US. Europe has no problem.
For now.... the EU will start on China soon enough
Doubtful, when Chinese steel was entering the EU, the EU took too long to put a measly 40% tariff on it, while the US slapped a 200% tariff very quickly. The EU will only act on China if it affects the Germans or the French. The fact that the EU has systematically let British industry die out so the UK has become reliant on purchasing goods instead of producing. The UK needs a steel industry yet the UK government can't bail British steel out because of stupid anti competitive laws on nationalisation and state bailouts.
 

Mr Majestyk

Posts: 389   +316
More expensive in the US. Europe has no problem.
For now.... the EU will start on China soon enough
Doubtful, when Chinese steel was entering the EU, the EU took too long to put a measly 40% tariff on it, while the US slapped a 200% tariff very quickly. The EU will only act on China if it affects the Germans or the French. The fact that the EU has systematically let British industry die out so the UK has become reliant on purchasing goods instead of producing. The UK needs a steel industry yet the UK government can't bail British steel out because of stupid anti competitive laws on nationalisation and state bailouts.
Spot on and you can repeat this story for Australia verbatim. We recently closed down our entire car manufacturing sector, 4 brands all gone and with billions of man hours of skills that were breeding ground for nearly all other manufacturing areas. We are just a third world country that digs up coal and iron ore and sells our resources for a pittance and imports everything else.
 
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loki1944

Posts: 369   +221
Steam shows the majority of those registered have a GTX 1060.

On its own, a 1060 is still over $250.

A PC Gamer still needs a COU, motherboard, OS, HDD, PSU...MONITOR...

Most gaming-grade computers surpass $600
Actually the 1060 is only 15%; which is heavily outnumbered by much cheaper/older GPUs in the survey. Also the 3GB 1060 msrp was $199. And we are talking about a vast majority who are not looking for the high end at all, 8GB or less RAM, 4GB or less VRAM, 92% 4 or less CPU cores, of which over 26% only 2 cores. And let's not think that people don't dual purpose their TVs for monitor/speakers. You can't look at it like an enthusiast who prioritizes pc gaming performance. There is also the case that you can still get by with a core2quad, and most definitely with Bloomfield era quad cores, so if you have those still around you are fine if you're not an enthusiast.

You can build a decent 1080p gaming PC for about the price of a console and just use your TV.

[PCPartPicker Part List](https://pcpartpicker.com/list/z2DGpG)
Type|Item|Price
:----|:----|:----
**CPU** | [Intel - Pentium Gold G5400 3.7 GHz Dual-Core Processor](https://pcpartpicker.com/product/Pv...-g5400-37ghz-dual-core-processor-bx80684g5400) | $74.99 @ B&H
**Motherboard** | [Gigabyte - H310M A Micro ATX LGA1151 Motherboard](https://pcpartpicker.com/product/pmF48d/gigabyte-h310m-a-micro-atx-lga1151-motherboard-h310m-a) | $55.99 @ Amazon
**Storage** | [Seagate - Barracuda 1 TB 3.5" 7200RPM Internal Hard Drive](https://pcpartpicker.com/product/dCxfrH/seagate-internal-hard-drive-st1000dm003) | $38.99 @ Amazon
**Video Card** | [PowerColor - Radeon RX 580 8 GB Video Card](https://pcpartpicker.com/product/rK...rx-580-8gb-video-card-axrx-580-8gbd5-3dhdv2oc) | $179.99 @ Amazon
**Case** | [Rosewill - RANGER-M MicroATX Mini Tower Case](https://pcpartpicker.com/product/v6w323/rosewill-case-rangerm) | $19.99 @ Amazon
**Power Supply** | [EVGA - 550 W ATX Power Supply](https://pcpartpicker.com/product/qrwqqs/evga-550w-atx-power-supply-100-n1-0550-l1) | $34.99 @ Amazon
| *Prices include shipping, taxes, rebates, and discounts* |
| **Total** | **$404.94**
| Generated by [PCPartPicker](https://pcpartpicker.com) 2019-05-28 01:25 EDT-0400 |

If you wanted to save more and get a copy of Windows directly from MS/MS retailer vice cheaper sellers or using Steam OS; ebay is a great place to cut down costs and pick up say...an R9 390 for $92 or GTX 1060 3GB for $76 to compensate.

You have to think like someone trying to save money.
 
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Knot Schure

Posts: 292   +125
You’re saying : American Corporations took factories to China? Well...
#1 China's currency is artifically held low at 6.9 Yuan to $1

When I lived in China, it was 8.277 Yuan to $1.

China keeping their currency artifically low ensures that it's more profitable for companies to produce in China using their children as slave labor than it is to produce domestically.

Trump is right about that - but the trade war is only gonna mean suffering for American pockets in the short term.
I remember being in a nightclub, in China, 1999, and a beer was $0.60 USD. Laughed my head off, and swigged it right down.

And maybe it was my youth, who knows, but the girls were E and Z.
 

Bubbajim

Posts: 720   +694
The fact that the EU has systematically let British industry die out so the UK has become reliant on purchasing goods instead of producing. The UK needs a steel industry yet the UK government can't bail British steel out because of stupid anti competitive laws on nationalisation and state bailouts.
The British government let our industry die, not the EU.

Yes, the UK (and any other member state) needs to make a case to the EU Commission in order to abide by state aid rules, but the EU Commission has never refused a request by the British government. But the Tories don't want to make a request on behalf of British Steel because they don't want to upset China. This isn't the EU's fault, it's our own government's.
 

Dosahka

Posts: 215   +83
Honestly I would gladly pay more to have production done in the US, by Americans.
Well then, the price hike won't stop at 25% increase, even workers will demand higher salary (I believe the average factory labour in china is ~400-500 USD per month after tax with 6 days of work and 8-10 hours a day).
Would a US citizen work for the same salary with the same conditions? doubt that, at least 3-4 times more salary and 5 days of work. Let's calculate that price into the device which the consumer will pay, yeah that console will get a hefty price tag around $800-1K, but it will be Made in US.
 
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loki1944

Posts: 369   +221
Well then, the price hike won't stop at 25% increase, even workers will demand higher salary (I believe the average factory labour in china is ~400-500 USD per month after tax with 6 days of work and 8-10 hours a day).
Would a US citizen work for the same salary with the same conditions? doubt that, at least 3-4 times more salary and 5 days of work. Let's calculate that price into the device which the consumer will pay, yeah that console will get a hefty price tag around $800-1K, but it will be Made in US.
You're assuming; rather naively, that the consumer isn't already getting ripped off. The market and the manufacturers will adjust to what sells.
 
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