As I write this, in one day’s time, the US will implement a massive global tariff programme that will place new taxes of between 10% and 60% on all goods coming through the US border. Now: we make goods that go across the US border – at least, the ones going to US customers do – so this is the sort of thing that we find somewhat concerning. I’ll quote Meredith Placko, CEO at SJG and Turbo Dork Paints, for the maths here:
Here are the numbers: A product we might have manufactured in China for $3.00 last year could now cost $4.62 before we even ship it across the ocean. Add freight, warehousing, fulfillment, and distribution margins, and that once-$25 game quickly becomes a $40 product. That’s not a luxury upcharge; it’s survival math.
The maths for us is different for different products and, as I write, there’s still uncertainty about whether books will be subject to the same tariffs, but the point remains. If those numbers are 10%, 20% or 54%, there’s still an increase that will have to be borne somewhere along the American chain from publisher to manufacturer to warehouse to distributor to store to customer – potentially, everywhere along that chain. The purpose of these tariffs is supposedly to raise money for the US government, to increase local manufacturing, and perhaps also to dissuade importers from importing things at all; we find it more likely that these tariffs will hurt American customers than that they’ll achieve their stated aims.
Let’s be clear: these tariffs are silly. If you wanted to increase American manufacturing, you’d start by supporting the growth of manufacturing businesses in America. It might take 12-24 months for a new factory to come online, once the decision was made to onshore a piece of a product’s pipeline – and those decisions are not made lightly or quickly, so you’d make sure everyone in business knew the plan. You’d offer incentives to American businesses to start up new plants in specific areas, and then you’d introduce tariffs over one or two years. Carrot first, then stick, with plenty of certainty and plenty of time for the slow bureaucracy of big decisions to grind its way to the outcome you want. There’s no agile way to replumb the global trade networks or most manufacturing businesses; you can’t spin up a new factory in a weekend, or a month, or even a year. These tariffs are not going to do what their proponents claim they are trying to do.
You could argue that, as a British company, we don’t get to have a voice in all of this; we’re doing something that the US is trying to stop, and so the pain is the point. But so much of our community, our industry, our friends and our customers are in the US, and without all of them, we wouldn’t be what we are. There’s no local, American substitute for Heart, or Eat the Reich, or Honey Heist; you can’t just swap out one piece of art for another.
And there’s no way, even if we were based in the US, that we could make our books and games there. Even if we found the right on-shore printer (and if they’d take our calls this week, given how busy they would be right now), the paper and the ink they use, the special finishes applied to our books, even the printing machinery itself is all part of a massive global supply chain that is all about to get a lot more expensive. It’s even more complex for other kinds of games, cards and tokens right now.
We see two big impacts coming from these tariffs, not just for us but also for many other industries. Manufacturing in the US just is not possible for a lot of products, and where it is possible it’s massively more expensive than going offshore, often for worse quality. So on one hand: folks will go ahead and do what they were doing before, but they’ll raise prices to compensate for the increased cost of import. Or on the other hand: people who were planning to do things, to make things, will stop. American entrepreneurs – people who make small games, people who are starting out now the way we started out a few years ago – those people will just not do things. On one hand, prices will rise; on the other, people will lose jobs, and businesses will not get off the ground. Rock, meet hard place.
Games are not going to be the place where this squeeze will be hardest. We don’t know yet precisely how we will be affected, or what decisions we will need to make as a result of these changes. As I’ve said above, as written, the tariffs appear to carve out exemptions for books, which means that some (though not all) of our products would be unaffected. But because of the timing, the lack of clarity, the lack of an implementation period or of legislation setting out detail – and the presence of other mistakes such as tariffing uninhabited islands – we lack confidence that the exemption is intended to hold up in practice. We don’t really think anyone has clarity on the intent, right now; the chaos at the ports over the coming weeks will be significant, and there will be a lot of test cases. We also don’t know if these tariffs will be the last to be announced. There is no certainty, right now, when it comes to the US administration’s actions.
Assuming the tariffs are implemented as they were announced, we will likely raise prices on some items; if that happens, we’ll do so in a way that lets the stores who buy our games raise prices too, so they can still make their margin. Your friendly local game store is about to get badly squeezed, and we don’t want to be another source of pressure. We have some plans we’ve been working on that could help us to weather this storm; we’ll be doing some experiments and making some decisions to get those plans in motion a little faster.
There are some things we definitely won’t do. We won’t cut pay for our writers, our artists, our designers, our editors, our staff or our contractors. We commit to paying people a living wage – and in reality, for US folks, that living is about to get more costly. We won’t undercut the broader market, and we also won’t raise our prices without good reason. We won’t stop offering free games – we believe, right now, we have the largest stable of free-to-download RPGs of any publisher out there, and they will stay that way. We will not stop making work that we care about, and that we hope you care about too. And we won’t stop making games that have opinions about the world, that say something meaningful, and that help groups of people all over the world make stories.
We think play is important: it brings people together and it lets us collectively imagine a better world. It doesn’t change the world on its own, but it helps expand the realm of what’s possible, and in-person play is one of the last leisure activities that is not subverted for advertising or attention hacking. We are building story machines that people can use to laugh together, to imagine freely, to rest, to find respite, to escape, to create, to find catharsis and emotional connection and joy. We do not believe that all Americans share this aggressive vision of an isolated USA, raising barriers to global trade and travel alike, and standing alone against the world. We believe in connection, and through connection, strength.
– Maz, and the rest of the RR&D team
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