Sony has warned that PlayStation consoles will become more expensive if the Trump administration goes ahead with higher tariffs on more Chinese exports, the WSJ reports. The Trump administration, which raised tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods this past May, is now threatening to expand tariffs to an additional $300 billion of Chinese exports, which would include video game consoles.
In preparation for the potential expansion of tariffs, Sony says it’s now considering its options, including passing the cost of production onto its consumers. (The WSJ paints the price increase as a necessary step if the tariffs continue, though one Sony exec clarified that nothing has been decided yet.) “We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy,†Sony’s financial chief Hiroki Totoki said today.
Sony teamed up with Microsoft and Nintendo last month to issue a statement to the US Trade Representative’s Office against the proposed tariffs. The letter states that the tariffs would significantly disrupt their businesses, but that ultimately American consumers and small businesses like video game makers would take the biggest hit. The seven-page letter estimated that consumers would have about $840 million in costs shifted directly to them, and 200,000 American jobs would be at risk.
In preparation for the potential tariffs, console makers have begun confronting whether to take their manufacturing businesses out of China. Last month, Nintendo started moving production of its new Switch models from China to Southeast Asia. However, neither Sony nor Microsoft, which recently refuted reports of the company taking Xbox production out of China, have made any moves yet.
It was reported today that Sony hit the 100 million mark in PS4 sales, making it the fastest home game console to reach the milestone. But with Sony gearing up to release the PS5 in 2020, sales of the six-year-old PS4 have slowed down. The PS5 has been described as a niche product with serious specs, which could set its price pretty high when it goes on sale; if Trump’s proposed tariffs go through, it could be even more expensive.
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