Tariffs Could Cause US Game Companies to Fold, Stegmaier Warns

It is a cliché that the board game industry is driven by innovation, community, and low profit margins. Now, a massive financial shock that some fear could make it an endangered pastime is threatening the game industry.

The news began this week with a tweet of outrage from Jamey Stegmaier, the designer behind popular games Scythe, Agricola, Viticulture, and Wingspan. “I do not understand how people could be this cruel,” Stegmaier tweeted, after a 54 percent tariff was announced on all goods made in China and imported to the U.S.

Stegmaier has followed up with a blog post on the news, opening with the sobering sentiment, “Last night I tried to work on a new game I’m brainstorming, 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 the designer of some of the most popular games in the world, it is a rare and vulnerable note—and one that many in the industry can empathize with.

China: The World’s Boardgame Factory

U.S. publishers of board games import 80 to 90 percent of their wares from China. Other countries do have board game factories; Germany is the spiritual capital of the modern tabletop gaming industry, for instance. But the deep bench of manufacturing for every piece, from printed cards to custom plastic miniatures, wooden tokens, die-cut boards, and specialty dice, makes China the default.

That custom manufacturing isn’t made domestically only because of cost. It’s theoretically possible, but practically an impossibility. Stegmaier said in an interview, “The most inexpensive manufacturer I’ve ever been quoted in the US was $10 for an empty game box with no inserts, no custom plastic, no cards.” That same $10, he noted, would cover full production and packaging in China.

The added tariffs will therefore be a seismic market shock for U.S. publishers. U.S. manufacturers, and even more so, smaller and mid-sized publishers, operate on thin margins. The steep and sudden change in pricing, with little to no leeway to make adjustments, has thrown the industry into a panic.

The Effects on the Industry: A Crack-up

Designers and publishers have been quick to respond to the news. Meredith Placko, CEO of Steve Jackson Games (makers of Munchkin), hit the theme park on Friday with her response to the new import tax.

“Some people ask, ‘Why not manufacture in the US?’ I wish we could,” Placko wrote. “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.”

Placko, who has been running the company for three decades and is a widely respected member of the industry, called the new tariff policy “not just a policy change” but “a seismic shift” for the whole board game market.

Rob Daviau, co-founder of Restoration Games and designer of Pandemic Legacy, has also been sounding the alarm. Daviau has been tweeting on the subject at length for months, and described for BoardGameWire that almost every business meeting has become “an existential crisis about our industry.” Daviau made clear in the interview that he expected a “great collapse in the hobby gaming market in the US” if any tariffs were to come to pass.

Effects on Consumers and Retail

Gamers will likely feel the impact of these changes soon. Prices for new games at retail will have to increase, or companies will have to cut costs to maintain their prices. Expect the former, which means less money, or the latter, which means lower quality products. Daviau predicted fewer games in general, as publishers pull back on future releases and re-focus on their back catalogs.

Local game stores are also under threat. The rise of online shopping has already eaten into retail for brick-and-mortar stores, which are often the cultural hubs of gaming communities. Gamers already facing retail price increases might instead be encouraged to play the backlogs of unplayed games from their shelves of shame, or buy new games online, hurting local stores further.

“In a few months, US companies will lose a lot of money and/or go out of business,” Stegmaier tweeted. “And US citizens will suffer from extreme inflation.”

No Way Around It, Yet

The structure of the industry makes it difficult to avoid the tariff by shipping through a non-U.S. distributor (European markets, for example, are not as hard hit by this tariff). “65% of [Wizkids’] sales come from the US,” Stegmaier noted. “No solution here.”

Even more galling for some is the fact that publishers and designers who are still in the design or early prototyping phase can delay production to account for the new costs, but games already manufactured and shipped from China have no way to duck the tariff. Chris Solis of California’s Solis Game Studio detailed the predicament he now faces in an email to Dicebreaker: “I have 8,000 games leaving a factory in China this week and now need to scramble to cover the import bill.”

Industry Response

The Game Manufacturers Association (GAMA), which lobbies for game publishers, is leading the charge to fight back against the tariffs. So far, these efforts have come to little.

The industry faces one of the most difficult moments of its short, modern history. For a medium built on joy and community, the future is suddenly looking more uncertain than it has in years.