Penguins and Publishers: Talking About Tariffs and Board Games

In the past, I've written about my activity/hobby/obsession - the collection & playing of board games. With over nine hundred games in my game room (and adjoining office), it's not like I desperately need any more board games. (That, of course, hasn't stopped me from buying & backing them.)

Over the years, I've been privileged to meet (and sometimes befriend) designers, developers, and publishers in the board game industry - and in a number of cases assist with playtesting and proofreading games. Additionally, I've had the opportunity to write extensively about board games - and even appear on some gaming podcasts as "special guest". 

I realize that this hobby of mine is exactly that - a hobby - and the money I spend on it is certainly discretionary spending. I also realize that the current tariff policies created by the order of President Trump are doing real damage to companies and individuals that are a part of this hobby.

Right Here, Right Now

It's Monday evening, April 7th - and the President has "threatened to impose additional tariffs on China for retaliatory measures it took after Trump announced his plans last week." According to ABC News, "A senior White House official told ABC News that this would be in addition to the 34% reciprocal tariff Trump announced last week and the 20% already in place, making for a potential total of 104%."

One of my game designer friends said it succinctly:

"It’s literally a shot in the back of the head for the American toy and game industry."

That includes game designers who have welcomed me into their homes, game publishers who've generously donated not only for conventions and invitational events but also to support families in need, and game store owners who've provided places of friendship and community.

Penguins?

As tempting as it is, I'm not going to waste your time by reposting any more of the truly funny penguin-oriented memes that began cropping up as people realized that our government had chosen to put reciprocal tariffs on two islands near Antarctica that are only inhabited by those flightless birds. (I will note that imposing tariffs on uninhabited islands pretty much sums up the careful thought and in-depth consideration that was taken by Mr. Trump and his administration.)

Instead, I'm going to focus on sharing some dark but thoughtful commentary on these so-called "economic policies" from board game publishers. (All of these quotes were posted prior to the 104% threat.)

Jamey Stegmaier of Stonemaier Games

I’m still reeling from the news. Yes, this was a likely hypothetical (as I discussed in detail in December), and 20% tariffs have been in place for a few months, but the reality of a 54% tariff is devastating. There is no math that makes it work. There is no silver lining. It is a lose-lose-lose situation for everyone involved except the US government (which, in the long term, will also not benefit from the repercussions of the tariffs).*

So yes, it’s really bad. A mix of the above strategies may help mitigate the negative impact of these tariffs, and if you have anything to add to the list, please share it in the comments.

My heart goes out to my fellow creators, designers, publishers, gamers, and everyone else in the tabletop industry and community. Creating a game is so much more than manufacturing–in fact, most of the people involved aren’t printing and assembling the game. If you’re passionate about US manufacturing, that’s great–I am too–but (a) there’s a lot of other US-based jobs beyond manufacturing that deserve your passion too, including all 7 of my coworkers, and (b) please don’t let that passion turn into racist, xenophobic zeal: In every country, there are companies that treat their employees well and companies that treat their employees poorly. This isn’t about nations–it’s about companies and people. Our manufacturing partner, Panda, takes great care of their employees.

*If the government was serious about increasing American manufacturing, instead of penalizing companies for manufacturing overseas, reward them heavily for manufacturing in the US, especially for the first few years when the risks are highest. Do this with deliberation and intention, providing plenty of advance notice–even companies that have the option of US production can’t switch overnight.

Meredith Placko of Steve Jackson Games

Some people ask, "Why not manufacture in the U.S.?" I wish we could. But the infrastructure to support full-scale boardgame production – specialty dice making, die-cutting, custom plastic and wood components – 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.

We aren't the only company facing this challenge. The entire board game industry is having very difficult conversations right now. For some, this might mean simplifying products or delaying launches. For others, it might mean walking away from titles that are no longer economically viable. And, for what I fear will be too many, it means closing down entirely.

Tariffs, when part of a long-term strategy to bolster domestic manufacturing, can be an effective tool. But that only works when there's a plan to build up the industries needed to take over production. There is no national plan in place to support manufacturing for the types of products we make. This isn't about steel and semiconductors. This is about paper goods, chipboard, wood tokens, plastic trays, and color-matched ink. These new tariffs are imposing huge costs without providing alternatives, and it's going to cost American consumers more at every level of the supply chain.

Note: I'm not sure I agree with Meredith about the efficacy of tariffs - I've written about this last fall when I tried to convince folks not to vote for the current President. 

Mike Mihealsick of Game Trayz

Mike’s Monthly Book Report: Why Board Games Won’t Be Manufactured in the US Anytime Soon

“Surely this will be the last straw,” every comments-section on the internet whispered in one voice. “This will be the event that finally lets us make games right here in the USA.”

"No,” Mike said. “Stop that. Why would you even think that? Just… no.”

Manufacturing and world economy are big topics, but the one little corner of it I know a bit about is the part pertinent to the board game industry.

Today there are definitely factories right here in the USA that will take quotes and make games for you. In my personal experience, those quotes are typically 4x-10x higher than what we see from manufacturing partners in China. To be specific, the last quote I got from a US factory was $6.81 per unit for a game that would have cost $0.98 to make overseas.

In a vacuum, if you don’t know the first thing about anything else, then it might feel like there’s a numbers-based carrot-and/or-stick solution that will push US publishers to manufacture in the US. Unfortunately, in reality there are a lot of other barriers.

Let’s talk about a few of them:

The “Finishing Factory Problem”

Board games require agile manufacturing, meaning that every game is different and they often have unique components made from different materials. There’s no one factory that makes all this stuff anywhere in the world. In fact, the manufacturers we know and love in games are print and finishing factories–meaning that they’ll print components like boxes and cards, but just about anything else is coming from a different factory down the road.

For example, if we want dice or wooden cubes in our game, we’ll ask Longpack to include them and quote us a price. But Longpack might not make those themselves–they’ll generally ship big orders of them in from a partner, then pick and pack them on site.

This is important because it’s the same process that our existing US game manufacturers use with one really big difference: there is no “factory down the road” in the US. When US game manufacturers run into components they can’t make in-house, they literally import those components–usually from China.

In fact, as I’ll talk about in the next bullet point, the limited manufacturing capabilities of US game manufacturers mean that they would need to import most if not all of the components to make just about any hobby board game out there at the same quality.

Quality

Right now, there’s nowhere that you can find the quality of product you find in China at a better price. In fact, it’s not even close. On top of that, CN manufacturers are professional and generally excellent at what they do, and their offerings are improving every year.

In contrast, US game manufacturers have very limited scope and quality, and they’re not bringing anything new to the table. Our existing manufacturers are suited to serve their existing domestic partners, and those partners are almost exclusively aimed at the mass market. If you think about the quality of components you find in a pack of playing cards at a gas station, the offerings you see from US manufacturers don’t really get much better.

I can order cards from CN in any dimension, in a variety of configurations between material and finish and density and core and everything else. US manufacturers have a fraction of a percent of the options, and if you want anything else–you guessed it–they have to import it.

Volume and Order Quantities

If the US embargo’d the world tomorrow and board game demand stayed the same, the existing US game manufacturers wouldn’t be able to come close to covering that demand (even if they could still source components they couldn’t make in house). There just aren’t nearly enough facilities to process those orders.

Also, weirdly enough, all the US manufacturers I’ve spoken to have very high minimum order quantities. I can order 500 units of a game from CN, but a lot of US manufacturers won’t get out of bed for less than 5,000 or 10,000 units. Unless those practices changed fast, small indie publishers forced to manufacture in the US would just die on the spot.

Equipment and Process

The processes (and often the equipment) used in manufacturing are developing every year, and most of them are proprietary. This means that, to serve the needs of the modern hobby game industry, US manufacturers would need to cover that gap by buying or developing those assets on their own.

Labor

While there are some unskilled jobs in manufacturing, there are also a lot of skilled jobs. This includes operators for all those proprietary processes and equipment. The US is not a place where those skill sets have been incubated over the last 75 years, so again this is another thing that a US manufacturer would need to acquire or develop.

Additionally, the cost of living in China is a quarter of what it is here in the US. Even though the wages are lower, even the unskilled laborers in the game manufacturing process make the equivalent of a pretty solid wage. They make more (adjusted) than I do.

As a disclaimer, yes there are definitely instances of exploitation in CN labor. We should absolutely be vigilant regarding these human rights abuses and they should absolutely be eradicated, but I’ve never seen any evidence of it happening anywhere in or adjacent to the game industry.

Materials Sourcing

Trees don’t just grow on trees. Materials are a competitive market, and US game manufacturers currently do not have a horse in that race. While we could source some of those materials domestically, we would almost certainly need to import a lot of it anyways, which would put us at a distinct disadvantage.

Lack of Investors

If you look at the last 6 items, you’ll see that general infrastructure is one of the big missing links. Infrastructure is something you can in theory just build out of thin air with enough money and time. 

I personally guess that the amount of money is “billions of dollars” and the amount of time is “5-20 years,” but that’s just speculation on my part. I imagine it as being a whole process, like gathering the Infinity Stones over the course of 10 years worth of Marvel movies. In any case, it won’t be cheap or fast.

The only reason it would make sense for an investor to commit enough money and time into establishing that infrastructure is if it were a savvy financial decision to do so. The problem is that it would not be a savvy financial decision to invest in game manufacturing–and it won’t be anytime soon.

In Summary

Right now, the future is unclear. We don’t know where the tariffs will go from here, but nobody has any reason to expect they’ll persist beyond the current administration. If you dropped a zillion dollars to build factories and those factories were made obsolete as soon as tariffs were lifted, you’d probably have a big zillion dollar lemon on your hands.

The US government made a conscious choice and effort to source manufacturing offshore that dates back to the 1950’s in an effort to globalize the US dollar. As a result, other countries and partnerships became staked in our success, and the USD became a major fixture in the world economy.

Americans have been reaping the rewards and eating that cake for the last 75 years, but now American wants to have that cake too. Unfortunately, at least for the game industry, that’s just not going to happen any time in the foreseeable future.

Note: Mike's "book report" appeared as a part of the Kickstarter update for Forsaken.

And finally, Connor Alexander of Coyote & Crow Games...

Not to make this all about Coyote & Crow, but yesterday's news from the US Gov may have some devastating impacts on C&C Games as a whole. A cumulative 54% import tariff on goods from China will essentially kill my company (and the games industry). 

Two Final Thoughts

Jonah Goldberg (The Dispatch)

If you want me to offer ideas about how we can do better at manufacturing chips or building ships, or to contain China, I’m happy to think about that or have that conversation. But you’re not going to get me to agree that because we should do those things, declaring economic war on Mexico, Canada, Japan, the EU, and the U.K. makes sense. You won’t convince me we need to save manufacturing by making bananas and avocados more expensive. Nor will you get me to say, “at least he’s trying.”

Me:

If this hellscape is true for the board game industry, how many other American companies and individuals are being ground up in service of the President's inability to understand basic economics and his advisors and fellow Republicans unwillingness to speak truth to power?