The Xbox 2 and PS5 could be seriously expensive — and it’s not Microsoft or Sony’s fault

Console giants Nintendo, Sony and Microsoft have come together to speak out against the negative effects of the US Government’s proposed trade tariffs could have on the industry. The timing couldn’t be more important, as 2020 is likely to see the release of an PS5, Xbox 2 and new Nintendo Switch variants. 

Putting aside the timeless console war for just a second, the three have sent an open letter to the office of US Trade Representative’s general counsel Joseph Barloon on June 17, responding to a request for public comment on the proposed 25 percent tariff that will be levelled on all goods manufactured in China.

This 25% tariff would hit a huge range of consumer electronics, including the video game consoles currently being produced by Sony, Nintendo and Microsoft. Microsoft is a US based company currently headquartered in Redmond, Washington. 

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“Video games are a core part of the fabric of American entertainment culture” claims the letter, adding “a price increase of 25 percent will likely put a new video game console out of reach for many American families who we expect to be in the market for a console this holiday season. For those purchases that do go forward despite tariffs, consumers would pay $840 million more than they otherwise would have.”

The letter also mentions that some 60% of Americans play a video game daily, and that some 96% of all consoles located in the US in 2018 were manufactured in China, so nearly every American gamer would be negatively affected by the proposed tariff. 

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The letter claims that not only would consumers be worse-off, but would in fact put “thousands of high-value, rewarding US jobs at risk and stifle innovation in our industry”, which would hit the US economy. 

It’s not clear if or when the proposed 25 percent tariff would come into play, but if it does come into place ahead of the launch of Project Scarlett, a future Nintendo Switch model and the as-yet-unnamed PlayStation 5 console, it could cause a tectonic shift in the games industry.