Sony warned that it would need to increase the retail price of the PlayStation 4 in the U.S. if the Trump administration proceeds with threats to raise tariffs on Chinese-made videogame consoles. “We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy,” Sony finance chief Hiroki Totoki said on Tuesday.
In May of this year, increased tariffs went towards $200 billion of Chinese made goods, bringing the tariffs from 10 percent to 25 percent. Further tariffs on $300 billion worth of goods have also been threatened, including on gaming consoles. The talk will resume this week between the U.S. and China, with many people perceiving the further tariff threats as a negotiating tool.
Companies affected by such tariffs are getting placed in an awkward position. They need to find a way to react to the tariffs while also keeping both shareholders and customers happy. Absorbing too much of the extra taxes can have a disastrous effect on predicted revenues and subsequent financial reports. They also cannot pass on too much of the cost to consumers, as it would negatively affect anticipated sales.
Things get even more awkward when you consider that new consoles are coming to the market next year. Any tariffs would almost certainly affect the price that consumers could expect to pay at launch.
Sony, Nintendo, and Microsoft recently teamed up to show how serious they feel the tariffs are to the videogame market. They sent a letter to the U.S. trade representative’s office to express their concerns about the impact of potential future tariffs.