Will the trade war affect the next-gen console's price?

it be US only in this case. Tariffs are a tax on the people buying something from the outside. Not a surcharge to the person selling from the outside.

I think that's unlikely. I'm sure you already know this, but Sony and Microsoft lose money on every console sold. I'm sure they would give consoles away for free if they could trust consumers to not take advantage. The profit is made on Games, subscriptions, and accessories. The next consoles will likely cost $300-$500. They will eventually need to be competitive with streaming devices like Google Stadia. Streaming games may not seem like a real contender today, But after Fiber and 5g start to reach much of the population, It will likely become a popular choice.

I think it will depend on pre-launch vs post-launch for any tariff.

Pre-launch, they'll likely take the tariff into account of the launch price and perhaps even increase prices globally slightly higher to compensate for the US loss. I know about the Razor and Blade model but I doubt they would want to increase costs that high. This assumes they continue to manufacture in China and not switch to some other cheap country or use some loophole.

Post-launch however and it's more likely we'll see them put the burden on US consumers, although whether it's the full amount I don't know.

One possible comparison is Brexit in the UK, where we've had things like immediate price rises on certain good and manufacturers/retailers swallowing the costs, at least to a point (haven't done research into any indirect or slow price rises).

A part of me wonders if Trump's trade war/tariffs could end up be the catalyst for people switching the streaming if console costs get too high? Due to the lower cost of entry for consumers.

Anything may affect the perceived price of next gen console prices.

Trade war? Check.
You losing your job? Check.
Oil crisis and war with Iran? Check.
Nuclear war with Russia and China? Check.
Elon Musk sending next gen consoles to Mars? Check.
Global warming? Check.
EA's surprise mechanics? Check.
A new meltdown in some Japanese nuclear rector? Check.
Some global epidemic arising due to people not getting vaccinated? Check.
Aliens suddenly getting interested in gaming consoles? Check. (blame Elon Musk for introducing them to gaming)
Me getting out of ideas for this BS list? Check.

If manufacturing is relocated elsewhere the prices not might change much and the quality of the product might increase. I thought I read that Nintendo started having parts for its next Switch revisions produced outside of China due to the upcoming tariffs, but don't exactly recall where I read that at.

Yeah, I read that somewhere also: they moved them from China to some "undisclosed Asian country".
TBH, I think quality might decrease instead of increasing. I think it follows common sense.

The Chinese already have the know how and the infrastructure, if you suddenly move production to a new place you need to build up or adapt this know how and infrastructure: expect some transitional fuck-ups and reduced overall quality.

@tech3475 good point! If the tariff does take into effect for the next gen consoles, I wouldn't be surprised if Google uses this moment to seize the market with stadia

@sarkwalvein - Is that how it works? You'd think that they would make sure the product is at least functioning correctly before shipping it, not the other way around? I would expect some hiccups during the initial runs, but not expect Nintendo to push those faulty products on consumers. When everything is setup and working the quality could be an improvement. I was trying to stay positive about the situation. Everyone wants to focus on negative outcomes because they disagree with the way things are going, but that doesn't mean the outcome is going to be negative.

@eriol33 I don't think minor price increases are going to effect the general user base for next-gen consoles. The Switch in 1988 would have cost $130 and the NES today would have cost $450. I don't see how adding the estimated sum of 25% to the price would make much difference. Now, if you simply couldn't buy Nintendo products anymore in the USA that would be concerning to me, but the tariffs aren't outright banning their sales.

The Stadia is interesting to me due to their plans to include retro games from all sorts of consoles in their gaming library. I'm not sure that I would want to rely on an Internet connection to stream modern games with nor would want to invest in a console that required constant online connectivity, but if you could possibly legally purchase thousands of retro games and play them offline then I would be interested in it. They are definitively limiting themselves to a smaller market by using streaming as Internet speeds in the USA aren't that great in most places.

What I could see is Microsoft gaining a competitive edge if they moved production into the USA or in all reality stuff staying about the same as it is now if companies simply move production out of China. I personally don't mind the latter as of the last 20 or so years the quality of the products coming from that shit hole have decreased while the prices have generally increased.

@cots
Is that how it works?
Yes, movement of production requires training and regaining the know how and adaptation of facilities, that means increased manufacturing costs, increased delays, decreased quality in the first products. A sudden movement of production does not increase quality at all, one that was planned with that in mind might, one done as an emergency to avoid increased tariffs will not.

The product is at least functioning correctly before shipping?
Of course, but not with an increased quality but a reduced one.
After the initial hiccups (i.e. transitional fuck-ups), it might end up with the same, worse or better quality. But the transition may take time, and in the long run we are all dead /s.

Staying positive about the situation?
Sure, it is just video game consoles. Everything will be alright.
Perhaps a little more expensive, no problem.
Perhaps the first units from the new production are not assembled as good, or break up more often... it is ok.
I don't see any reason to be very worried, at least not to be negative. The transition will be over eventually.

@sarkwalvein - Well, that's disappointing. I guess mass producing a video gaming console is more complex than simply picking the best place to have your PCB design produced (as you could shop around for the right quality and price). I'm usually not one to pick up launch day consoles, mainly due to the later on price reduction, hardware and software revisions so I wouldn't have a problem waiting for the "bugs" to be worked out.

Hopefully, if production is indeed moved out of China we will eventually see better quality products with a price that is fair (as I don't mind paying more for something that'll last longer as that's a better investment). I still have stuff from the 80's that "just works" while modern stuff produced in China has a 2 year expected lifespan and somehow that's acceptable to most people.

cots said:

You'd think that they would make sure the product is at least functioning correctly before shipping it, not the other way around?

Click to expand...

If you are buying my "if it fails then someone dies" product for thousands and a margin over bill of materials nearing 400% then sure. If you are buying a consumer product that is $300 landed and with margins over BOM far lower than the previous then not on your life -- you might get a panelisation test and a button test if you are lucky. If nothing else see what it took to get a thing replaced for dead pixels as that usually tells you how much they care* and what kind of profit margins they are operating at. Similarly it is not as much the basic functionality on day 1 that will get people but the months-years down the line failure or massively increased chances of failure (warranties for a lot of Europe are "reasonable lifetime" or otherwise several years by default) and batch level burn in and accelerated failure testing is possibly a bit strong there, some kind of individual burn in test is right out.

*if they are buying cheap screens then it is an exceptionally good bet they are also buying the lowest binned chips they can get away with and pushing quality margins as hard as they can there. I can go further into semiconductor testing if you want but the short version is most things are made the same, they might have some extra fluff built around them in the final product but as it comes off the wafer they are often all the same and parts of it deleted according to need or failure, and then tested to see what that one will take and numbered accordingly. Similarly when it is being examined by microscope if a track is a bit thin in one place (leads to something called electromigration, which is probably the most common failure of a chip) then they can still choose to use it.

Beyond that then yeah spinning up a semiconductor factory (and Nintendo is a fabless semiconductor firm last I checked) is an expensive hobby, mass manufacture electronics assembly not much better. Such things also wants people trained up in the various processes and between locals and those they have sent abroad for the last few decades China has that, most other places with cheap labour in Asia I have seen less so (plenty do software and hosting well but higher end electronics and hardware is not the same).

What I imagine will happen though is just enough will be done not in China to count as happening somewhere else, same as it does for cars, pills and whatever else already and accountants are already with massive workarounds for.

Unless the tariffs are dropped by the time next-gen consoles are released, yes, the price will be at least 25% higher than it needs to be. Meaning an extra $100 assuming they're priced at $400 or more. Can't wait for the return of the '$599 US dollars' memes.

Here is discussion related to this topic on nintendolife. Most people are rather reasonable regarding the subject. It was interesting to read all of the replies.


I specifically like the man of fiath and his viewpoint. It was really grounded.


http://www.nintendolife.com/news/2019/06/nintendo_sony_and_microsoft_band_together_to_fight_tariffs_on_video_game_consoles

Canadian's beloved Prime minister is coming back from Asia with container full of pork mean haHAA!

Guess Canada is was full caught inthe cross-fire during USA-China's trade war, will ur dear Justin join the orange man's trade war as well?

Actually, for the most part, Trumpet's trade war will affect most consumers and players that in a way or another, buy products being sold and shipped from the U.S., but the most affected ones will be the U.S. consumers/players. Because other countries can find a way to trade directly with the exporting companies without needing to use the U.S. market as an intermediary. I do it myself, and for the most part I don't directly buy products being sold and shipped from the U.S. when I can import directly, and let me tell you that nowadays its easier than before.

CMDreamer said:

Because other countries can find a way to trade directly with the exporting companies without needing to use the U.S. market as an intermediary.

Click to expand...

While different routes to China (be it their own deals or that belt and road initiative) do mitigate some things a rising tide lifts all ships, and if a market like the US bottles out or contracts noticeably that means they will have to extra it elsewhere (or not bother) as I don't think Korea, India, the middle east and South America will rise up quite or other domestic markets will expand in time to fill the void. This also says nothing of the result to software where US based/financed/whatever devs pay less attention. Similarly trade routes to China it is not an especially new thing, nor something the US had the most say in, for some time now -- how long have Sony and Nintendo had European bases of operation that report more to the Japanese parents than the US divisions?