Gamers are likely the next group of consumers affected by the trade war between the United States and China.
As with other electronic companies, Sony has shifted more of its manufacturing to China over the last few years. Among the products being built in the country include the PlayStation, which has just sold over 100 million units.
That being said, it's expected that the PlayStation could see a price hike due to the ongoing tariff battle between the two countries, according to one Sony exec.
"We believe, and therefore have told the U.S. government, that higher tariffs would ultimately damage the U.S. economy," Sony Chief Financial Officer Hiroki Totoki told the Wall Street Journal.
He proceeds to say that if the trade war continues, consumes there is a huge chance that consumers will be burdened with some of the cost to account for import fees.
Totoki's statements follows the tariff increase of up to 25% ordered by US President Donald Trump back in May on $200 billion of imports from China, including products related to video gaming. It is unclear, however, if the tariffs Totoki warned about refers to consoles alone or if it would also cover China-produced games and accessories. A further tariff expansion would cover another $300 billion in products, including PlayStation systems.
China and the US have since resumed trade talks, but there is still a possibility that the games industry will still be impacted by tariffs.
In June, Sony, Nintendo, and Microsoft sent a letter to the White House requesting for video game products to be excluded from future tariffs. The three tech giants argued that continued tariffs on game products produced by China could stop innovation, which could threaten jobs and affect consumers negatively.
Nintendo announced they would be shifting some production of the Switch from China to Vietnam to counteract possible future tariffs. Several companies have also followed suit, including Apple.
As for Sony, the company is left in a tough position. Gaming consoles like the PS4 are typically sold at slim profit margins, sometimes at a loss early on. Recouping more money is made possible through service and games sales. There might not be much room for Sony to absorb the tariff costs or move production to another country.
This could also mean that the PS4 sales could suffer and leave Sony unstable until the launch of the PlayStation 5, which many expect to arrive late next year.
