Gamers May Feel the Squeeze As Tariff Fallout Hits Prices

The board game industry has long been characterized by innovation, creativity, a sense of community, and, by and large, relatively slim profit margins. The last thing anyone expected was for the future of the industry to be placed in jeopardy by a nearly billion-dollar tax bill.

Jamey Stegmaier, the designer of Scythe, a favorite amongst customers and a bestseller for the industry as a whole, took to social media this week to express his outrage and disbelief over the recent announcement of a 54 percent tariff on all goods manufactured in China and imported to the United States.

“I tried to work on a new game I’m brainstorming last night,” Stegmaier wrote in a recent blog post, “but it’s tough to create something for the future when that future looks so grim. I mostly just found myself staring blankly at the enormity of the newly announced 54 percent tariff.”

For a designer with some of the most successful titles in the industry, known and played by thousands of fans around the world, it was a strikingly candid and vulnerable post, shared by many in the community.

A Global Production Model Comes Under Fire

The U.S. board game industry is reliant on overseas manufacturing, and more specifically, manufacturing in China. While there are facilities for board game production in Germany, which most fans consider the spiritual home of modern tabletop gaming, China has been by far the most popular choice for a wide range of production.

When designers think of custom production in China, most are picturing not just printed cards but custom plastic miniatures, wooden tokens, die-cut boards, and specialty dice.

Domestic production of those components isn’t impossible. It is, however, expensive and slow. Stegmaier recalled that when he first started his business, he got a quote from a U.S.-based manufacturer for $10, just for an empty game box. By comparison, the same $10 could produce and package an entire game in China.

That is why the new tariff is such a major, sudden disruption. Margins for most U.S. board game publishers, especially small to mid-sized ones, are extremely tight. Add on nearly a 60 percent cost increase overnight, with no grace period, and that’s a major shake-up for the community.

Designers Sound the Alarm

Meredith Placko, CEO of Steve Jackson Games, publisher of hits like Munchkin, is another prominent voice in the community speaking out against the tariffs. The reasons her company—and, for the most part, every other U.S. publisher in the industry—sells to a foreign manufacturer are the same as every other company.

“I get asked all the time, ‘Why not manufacture in the US?’” Placko wrote in a recent blog post. “I wish we could! I’m an American small business owner who would love to ship games made in America, from start to finish. But the infrastructure to support full-scale boardgame production—specialty dice making, die-cutting, custom plastic and wood components, etc.—doesn’t meaningfully exist here yet. I’ve gotten quotes. I’ve talked to factories. Even when the willingness is there, the equipment, labor, and timelines simply aren’t.”

Placko isn’t just talking logistics here; she’s talking about infrastructure. The availability of certain production features makes for her, and for other U.S. companies, a major part of their competitiveness. “This is not just a policy change,” she said in an interview with Geek and Sundry. “This is a seismic shift for our industry.”

Rob Daviau, a co-founder of Restoration Games and designer of Pandemic Legacy, has also been speaking out for months. “Pretty much any meeting I have is an existential crisis about our industry,” Daviau told BoardGameWire in an interview last month. “If these tariffs ever come to fruition, the US hobby gaming market will have a great collapse.”

Gamers Will Feel the Impact, Too

The negative effects of such a sudden increase in production cost are not just going to be felt by the publishers and designers. Gamers will eventually be affected as well. The retail price of new games will likely go up; companies that want to keep retail prices low will either have to cut corners on production quality or forgo new releases altogether.

And the manufacturers who will suffer most from this aren’t the giants. They’re the independent publishers and designers, the ones with the closest relationships to their customers and retail partners. And those retail partners could be hard-hit, too. Brick-and-mortar stores have been suffering in recent years as more and more people shop online.

Local game stores could take a particularly big hit as players bunker down with their existing collections, many of which likely include a shelf or two of unplayed games—the so-called “shelves of shame” in board game parlance—or shop online to take advantage of bigger discounts.

“It is going to cause unprecedented damage to an industry that isn’t nearly as wealthy as it should be,” Stegmaier wrote in a recent thread on the game company subreddit. Within a few months, US companies will lose a lot of money and/or go out of business. And US citizens will suffer from extreme inflation.”

Few Alternatives, Expiring Patience

One possible solution some publishers have considered is to route shipments through a distributor in another country, such as Europe, where these tariffs will not impact the market as heavily.

But this doesn’t exactly benefit U.S. companies, either, as many of them get the majority of their sales domestically. For Stegmaier, that number is 65 percent. “In other words, we’re going to get pummeled,” Stegmaier concluded in his post.

But even more galling to publishers and designers is the fact that the timing of this is so awful for those with products already in production. For companies still in the design or early-production process, there’s some room to maneuver, budget-wise. But for games that have already been produced and are on a ship from China, there’s no such luck.

Chris Solis, who runs the small game studio Solis Game Studio in Southern California, said in an interview with The Star-News that, “I have 8,000 games leaving a factory in China this week and now need to scramble to cover the import bill.”

Industry Group Lobbies On Behalf of Board Game Manufacturers

The Game Manufacturers Association (GAMA) is a trade group and advocate for the board game manufacturing industry. It has been aggressively lobbying against these tariffs.

So far, those efforts have yet to see a policy change, but the group has been vocal in its efforts to combat these steep tariffs.

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The San Jose Mercury News is part of the Future US network.

Article 2: said, we do not expect the short-term impact of the tariffs to be too great because companies have inventory already in place.

In the short term, their analysis appears to be accurate. Most established U.S.-based companies already have products in production and on the water, having shipped in advance of the tariffs. For those companies with new games in production, and for any company shipping domestically, this will not affect them.

When you look at orders that have already been paid for and are in production, over 65% of GameQuarters’ gross comes from orders that are not subject to tariffs. Of the remaining, we will absorb as much of it as we can. Whatever the case, these tariffs will significantly affect the entire industry, and GameQuarters is no exception.

Gary Quattroni, Design & Production

Chris of Solis Game Studio also shared their reaction to the tariffs, noting, “It’s like someone came up to you while you were building a house, and said, ‘Oh, by the way, the price of lumber has just doubled.’”

U.S. Manufacturers Hope to Scale Up

The reality is, the U.S. does have board game manufacturers, they’re just operating at a relatively small scale in comparison to Asia. Many of these U.S. manufacturers simply do not have the capacity or any real experience in large-scale board game production. Add to that, many U.S. producers also have been manufacturing in the U.S. for a relatively short amount of time, as this industry, at large, is a relatively new one.

President of the Game Manufacturers Association (GAMA), Mike Parry, shared some options he has been exploring and noted that they “hope to support our industry by assisting member companies scale up in the USA.”

Duties (Tariffs) Destroy Board Game Sales by: Game Manufacturers Association, Inc.

Manufacturers face near-impossible challenges.

One way to look at all of this is by simply asking the question, “What could manufacturers have done differently to avoid these tariffs?”

For example, could U.S. manufacturers have significantly ramped up production in such a way, in time, to support American-made game components? Unlikely.

Could manufacturers have added a new U.S.-based manufacturing plant in a 4-5-month time frame? The answer here is a resounding no. For that kind of operation, you’d likely need a minimum of one to two years.

Is the U.S. infrastructure ready for this kind of shift? For most, no.

And finally, this isn’t just U.S. manufacturers that have had these kinds of challenges. The U.S. is not the only country that relies on Chinese manufacturing; many European countries have been hit with these tariffs as well, so any assumption of this being anything other than a “political move” is, frankly, nonsensical.

Board Game Creators Opt for Creative Solutions

Creative problem solving is a large part of this industry at all levels. Publishers, designers, and manufacturers are no exception.

One of the early solutions to this quandary was seemingly rerouting games through Europe and getting Chinese-manufactured games imported through a European-based company and shipped stateside. This, however, is still only a bandage on the larger issue.

Some U.S. publishers, like Grey Fox Games, are instead rerouting some orders to their small in-house U.S. operations (not equipped to handle large-scale manufacturing, even under the best of circumstances). Many publishers have already written off this product cycle and are simply eating the costs (smaller publishers especially). This is not a sustainable practice, but at least it may keep players supplied in the near term.

Questions Abound

Unanswered questions also abound. What about manufacturers that rely on the raw materials coming in from China, where these tariffs also apply? What about manufacturers that still need to do tooling in China?

How do U.S. manufacturers start scaling up at a level large enough to support U.S. production needs? Who will pick up the tab? How long will it take to scale up? If manufacturers are still subject to tariffs, then won’t the market price for U.S. production effectively drive out U.S.-produced products? How long will it take before those manufacturers that have scaled up and invested capital have a product that can compete on a level playing field?

The prices on local production look great, until you know how many units you need to sell to break even. Then you see a company with $350k in tools to make one game, and it feels like it will never happen. ~Ian

Ian, of Archie McPhee’s production team, poses some questions that don’t seem to have good answers.

Effects of Tariffs on Game Pricing

GAMA provides some interesting data when they break down how the tariffs will affect consumer pricing on games.

The tariffs will add 5% to the cost of gaming products. If passed on to consumers, it’s like an extra $6 on a $120 game.

When you think that many games retail in the $30-50 range, this is a pretty big deal. This doesn’t include the operating costs of opening a new manufacturing operation. Prices will certainly be going up.

Looking Toward the Future

The finality of this new tariff being in effect will, no doubt, cause a lot of conversations shortly. The ability to quickly scale up U.S. manufacturing, in general, is slim to none.

Unless the infrastructure is ready, many U.S. producers simply will not have the capability to manufacture large-scale, even if that is their preference. The result, at least for some, will be eating the cost or moving production to countries where tariffs are not in place. In most cases, it is the consumer who ultimately pays the price.

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