Nintendo, Sony, Microsoft Urge Trump to Withdraw China Tariffs in Joint Letter

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President Donald Trump

The three leading game companies claim the new tariffs will have a "ripple effect" across the industry.

The world's three leading game companies — Nintendo, Sony and Microsoft — have combined forces to urge President Donald Trump and his administration to reconsider tariffs against China which raise the price of both video game software and hardware in the U.S.

In the letter — officially submitted on June 17 to Joseph Barloon, general counsel of the Office of the United States Trade Representative — the three companies claim the proposed tariffs would "injure consumers, video game developers, retailers and console manufacturers; put thousands of high-value, rewarding U.S. jobs at risk; and stifle innovation in our industry and beyond." They then go on to request the specific subheading covering video game consoles be removed from the list of tariffs.

"In a single year (2018), our three companies collectively sold more than 15 million video game consoles in the United States alone. Together, we currently employ nearly 8,000 people across the United States," the letter states.

The companies note the economic growth that the video game industry has seen over recent years, citing the $43 billion it generated in revenue last year. As China manufactures more than 96 percent of all consoles sold in the U.S., the companies claim that the tariffs would "cause significant supply chain disruption to shift sourcing entirely to the United States or a third country, and it would increase costs — even beyond the cost of the proposed tariffs — on products that are already manufactured under tight margin conditions."

Last month, Trump ramped up tariffs on China from 10 percent to 25 percent, affecting such goods as meat, tobacco, salt, minerals, fertilizers, soaps, plastics and video game consoles. 

Citing a "ripple effect," the three game publishers say that the imposed tariffs on consoles would also harm smaller software developers which "depend on console sales to generate demand for their products." 

"Our consoles have generated a vast ecosystem of small and medium-sized game developers," the letter states. "A significant number of the games played on Microsoft, Nintendo, and SIE video game consoles are not developed by our companies in-house."

Furthermore, the companies claim that the tariffs could lead to a "delay of innovation." 

"Microsoft, Nintendo, and SIE collectively invest billions of dollars in research and development in the U.S. ... Importantly, many innovations originating in gaming have been deployed to the benefit of other industries and sectors of society," the companies write. They also tout the Xbox Adaptive Controller, the Nintendo Wii and Sony's Cell Broadband Engine, which have gone on to help innovate tech for U.S. veterans, smart devices and supercomputers.