US Game Makers Brace for Financial Pain Amid Tariff Chaos

The board game industry is renowned for being nimble, progressive, collaborative, and, above all else, not particularly profitable. But a new, financial hit could impact the industry, shaking the fragile foundations of an industry many worry is under threat of extinction. “This is nuts,” Jamey Stegmaier, designer of popular games like Scythe and Wingspan, wrote on Twitter this week of the recently announced 54 percent tariff on all goods manufactured in China and shipped to the United States.

“I tried to work on a new game last night, but it’s really hard to design something for the future when that future looks so grim,” he wrote in a subsequent blog post. “I mostly just found myself staring blankly at the enormity of the newly announced 54 percent tariff.” For a designer of some of the most popular games in the world, it was a highly personal and uncharacteristically vulnerable post—and one that is resonating hard with his peers.

A System Built to Fail?

First, a quick primer: The American board game industry is almost entirely dependent on overseas manufacturing in China. Germany, for example, has board game factories, many of them located in the city of Essen, which is the spiritual home of modern tabletop gaming, but these mostly service German publishers. China is different. You can order anything, from printed cards to custom plastic miniatures, wooden tokens, or game boards with die-cut inserts. Specialty dice? China, too.

It’s not even that such parts can’t be made domestically—more that it’s impossible, at the moment, to do so. Stegmaier was once quoted $10 by a US-based manufacturer for a single, plain empty game box. A box, mind you. In China, that same $10 could cover manufacturing and packaging of the whole game.

That is, until now, of course. The system is in place not because it’s an ideal manufacturing setup, but because it’s the only one available that has any kind of profit margin on it. The US manufacturers that can do the work quoted exorbitant prices because the infrastructure to do it simply isn’t in place domestically. That is why this tariff is such a catastrophic announcement for the industry: The profit margins are already too small, and that extra 54 percent is the kind of boost that will make all of a small to medium publisher’s profit margins go red, all at once.

The other issue is one of timing. There was no leeway given to manufacturers and importers; the tariff is in effect now. That means that no amount of budget readjustment can help games that are already on their way from the Chinese factory, and designers who are still in the process of designing and producing new games will still be left holding the short straw.

Industry Leaders Weigh In

Echoing Jamey Stegmaier’s sentiments is Meredith Placko, the CEO of Steve Jackson Games, the Austin-based publisher of games like Munchkin and GURPS. Placko’s company has been in operation for nearly four decades, and they are as committed to and reliant on overseas manufacturing as most anyone else in the industry.

“I get asked by readers and even, occasionally, by other companies, why I can’t just manufacture in the US. It’s a fair question, and one that I wish I had a better answer to,” Placko wrote in a blog post. “But the fact is the US doesn’t have the critical mass of expertise to support full-scale boardgame production—the specialty dice making, die-cutting, custom plastic and wood components—in a meaningful enough way. I’ve gotten quotes. I’ve talked to factories. When the willingness is there, the equipment, labor, and timelines simply aren’t.”

Rob Daviau, co-founder of Restoration Games and designer of Pandemic Legacy, has also been vocal on the matter, taking to social media for months to talk about how “basically every biz meeting right now is an existential crisis about our industry.”

In an interview with BoardGameWire, Daviau said he foresaw the tariffs as leading to a “great collapse in the hobby gaming market in the US” if ever they came into place.

Gamers Could Be the Real Losers

But it’s not just board game publishers and designers that will suffer; gamers may be hit too. Prices on new games are certain to go up. Some companies will try to reduce quality to keep prices at the same level, producing fewer, cheaper copies. Others will likely limit their new releases altogether, choosing to prolong the shelf life of their back catalog to weather the storm.

Retail game shops are also likely to suffer. Though many stores have seen their customer bases decimated by online distributors and marketplaces, gamers stuck with shelves of shame—unused, purchased but unplayed games on their shelves—are more likely to look through their collections first before upgrading their games online or in person, hurting sales further.

“I am worried that our retail infrastructure will not survive these policies,” Stegmaier wrote. “If these games all have huge price increases, US companies will lose a lot of money and/or go out of business within a few months. And US citizens will suffer from extreme inflation.”

Bad Timing, Little Help

So, how are publishers planning to work around it? Some may try to use non-US distributors, of course—European markets, for example, are much less affected. But that won’t change the situation for the US distributors and publishers themselves, which is the main concern, as Stegmaier points out:

“This is the 54% tariff that just got enacted. For perspective, 65% of our sales are in the US. 0% of our sales are in China.”

The other frustrating issue is the fact that the tariff has already come into effect. Games still in development or the first stages of production can rework their budgets; games that have already been manufactured and are en route to the US from Chinese factories cannot be spared this.

Chris Solis, head of Solis Game Studio, a game design firm in California, echoed this on Twitter: “I have 8,000 games leaving a factory in China this week and now need to scramble to cover the import bill.”

Response and Reaction

GAMA, the Game Manufacturers Association, which lobbies on behalf of board game publishers, was reportedly “bombarding the Office of the United States Trade Representative with data and talking points” and speaking to “key Hill offices about why this tariff could be detrimental to the hobby gaming industry.” But as yet, those actions have not resulted in change.

For an industry built on and bolstered by creativity, connection, and, simply, fun, it’s hard to know how the fallout from this decision will play out in the medium to long term, but one thing is clear: For a sector of the gaming industry that has already faced as many existential threats as the US-based board game industry has, there’s a long, uncertain future.