News Games might shift entirely to digital because of the 25% tariffs on imported discs

[Admin]

According to analysts, disc-based games may become prohibitively expensive if currently planned tariffs are enacted.

Games might shift entirely to digital because of the 25% tariffs on imported discs : Read more

 

[Konomi]

Optical media bad. This is fine.

 

[Shiznizzle]

This is not a big deal to most people now. Steam made it clear you are not buying anything but a license and they deliver digitally as do most other content delivery platforms. Game disks for the most part do not exist anymore. Maybe on the console side, i am a PC user so have no idea.

 

[Co BIY]

Tariff would be on the value of the imported component. Physical disc and packaging and would not be much. Not total price unless the IP was Mexican.

Kerbal Space ? I'm sure there are others.

 

[TerryLaze]

Tariff would be on the value of the imported component. Physical disc and packaging and would not be much. Not total price unless the IP was Mexican.

Kerbal Space ? I'm sure there are others.

But only a small number of game devs are US?
Konami capcom namco nintendo sega, heck ubisoft, double heck rockstar is UK based.

 

[bigdragon]

Someone explain to me how a 25% tariff on a disc that costs $1 to produce causes video games to jump in price from $70 to $85+.

An increase in costs of a quarter per disc does not justify increasing prices $15+ per game. Companies have spent years insisting that consumers are only purchasing a license to rent a game and not the actual assets on disc. This looks like companies looking for yet another excuse or scapegoat for price increases.

Personally, I trust Steam. I do not trust Playstation Network or XBox Live or Nintendo Online. I prefer physical media for all my console games because companies have a long-established history of shutting down their back catalogs and supporting services.

 

[Co BIY]

But only a small number of game devs are US?
Konami capcom namco nintendo sega, heck ubisoft, double heck rockstar is UK based.

How tariff's will operate work on software/IP purchases is interesting and a good question but this article is focused on Physical media.

I think the effect on tariffs for physical media should be negligible since it is a such a low "value add".

The goal of the US Tariff policy appears to be to create something like tariff "mirroring" as a starting point that will hopefully be negotiated to lower tariffs and fewer trade restrictions between the free and honest countries.

 

[TerryLaze]

I think the effect on tariffs for physical media should be negligible since it is a such a low "value add".

Should be, I agree, but my guess is that as soon as a physical game is assembled this physical 'whatever' is now worth the price of the game, even if there is just a steam code in the box.

 

[cryoburner]

Someone explain to me how a 25% tariff on a disc that costs $1 to produce causes video games to jump in price from $70 to $85+.

It's called "fearmongering" and articles like this play into it. The idea presented here is that game discs printed in Mexico would be subject to a 25% import fee on the value of the finished product. But realistically, manufacturers would simply switch away from printing discs in Mexican factories if that were the case. Printing discs isn't exactly some complex manufacturing process that only Mexico can do, and if necessary, new manufacturing facilities could be set up elsewhere relatively quickly. They are just being printed there due to the low labor costs, to save some cents per disc, but if the cost to import them from Mexico were to become much higher than the cost to print them, they would move the printing elsewhere before attempting to convince consumers to pay significantly more for games, when none of that extra money would be going to the publisher.

 

[Heiro78]

Someone explain to me how a 25% tariff on a disc that costs $1 to produce causes video games to jump in price from $70 to $85+.

An increase in costs of a quarter per disc does not justify increasing prices $15+ per game. Companies have spent years insisting that consumers are only purchasing a license to rent a game and not the actual assets on disc. This looks like companies looking for yet another excuse or scapegoat for price increases.

Personally, I trust Steam. I do not trust Playstation Network or XBox Live or Nintendo Online. I prefer physical media for all my console games because companies have a long-established history of shutting down their back catalogs and supporting services.

I couldn't agree more. I'm PC and Switch gamer. All but one game are physical on the switch. Okami HD

 

[TerryLaze]

It's called "fearmongering" and articles like this play into it. The idea presented here is that game discs printed in Mexico would be subject to a 25% import fee on the value of the finished product. But realistically, manufacturers would simply switch away from printing discs in Mexican factories if that were the case. Printing discs isn't exactly some complex manufacturing process that only Mexico can do, and if necessary, new manufacturing facilities could be set up elsewhere relatively quickly. They are just being printed there due to the low labor costs, to save some cents per disc, but if the cost to import them from Mexico were to become much higher than the cost to print them, they would move the printing elsewhere before attempting to convince consumers to pay significantly more for games, when none of that extra money would be going to the publisher.

Yeah, that's the point of the tariffs, anything that isn't US is gonna be 25% more expensive.
But making them in the US is probably gonna be more than 25% more expensive.

 

[cryoburner]

Yeah, that's the point of the tariffs, anything that isn't US is gonna be 25% more expensive.
But making them in the US is probably gonna be more than 25% more expensive.

The cost of printing a game disc is very low though, only a tiny portion of the cost of the product being sold at retail, not much more than a couple dollars or so. Even for physical media, the bulk of a game sale is going to the publisher, with another big chunk going to the retailer, with only a minimal amount going toward the disc itself. So even if the cost of manufacturing the physical media in the US is more expensive, that likely wouldn't even amount to a dollar difference in the cost of distributing a physical copy of a game.

 

[Alvar "Miles" Udell]

As much as I love physical media, the age of reselling your console games is pretty much over, and with so mang games having huge patches even on day one as well as huge install sizes, there's little reason for physical media to exist anymore.

 

[TerryLaze]

The cost of printing a game disc is very low though, only a tiny portion of the cost of the product being sold at retail, not much more than a couple dollars or so. Even for physical media, the bulk of a game sale is going to the publisher, with another big chunk going to the retailer, with only a minimal amount going toward the disc itself. So even if the cost of manufacturing the physical media in the US is more expensive, that likely wouldn't even amount to a dollar difference in the cost of distributing a physical copy of a game.

It's not about the material.
The labor cost and social security and all the rest of the stuff for all the workers adds up fast, plus the taxes and utilities and so on, the upkeep cost of a plant is much higher in the US so they have to charge a lot more.

 

[Heat_Fan89]

News Flash!!!!

This was heading in that direction, regardless. The tariffs will just accelerate it. I've been watching this play out for at least 10 years. Publishers were still reliant on brick and mortar stores. Then Gamestop pissed off the publishers by boasting "ever increasing used game sales". The publishers got really ticked because those were considered lost, new game sales.

Gamestop countered by saying that used game sales translated to new game sales. Except game publishers were not seeing those numbers. So the game publishers started complaining and leaning on the game console makers to help them out. By that time digital sales were picking up but not enough. That's when a push to eventually go all digital started to pickup steam.

At first there weren't too many discount sales but then Sony and Microsoft started promoting game discounts. Both Sony, Microsoft and Nintendo knew that it would be a benefit by cutting out the middleman, i.e. brick and mortar stores and basically create a one-time purchase instead of users selling their used games.

Once that started to take effect, Gamestop started to feel the squeeze. Now Gamestop is becoming a relic of the past and they have moved onto selling things other than videogames. The industry has Gamestop to thank for game sales going digital. Publishers benefit from digital sales and that's why eventually it will probably be close to 100% digital sales.

 

[why_wolf]

How tariff's will operate work on software/IP purchases is interesting and a good question but this article is focused on Physical media.

I think the effect on tariffs for physical media should be negligible since it is a such a low "value add".

The goal of the US Tariff policy appears to be to create something like tariff "mirroring" as a starting point that will hopefully be negotiated to lower tariffs and fewer trade restrictions between the free and honest countries.

lol you mean like NAFTA? The thing that Trump HATES. The thing that FOX News has spent the last 40 years demonizing and blaming for every lost job.

Their objective is not to expand trade. Its to end trade. Because if no foreign options you have no choice but to pay their monopoly prices.

 

[cyrusfox]

There was an optical disc manufacturer near my hometown, it got converted to a city building (think the police took it over). These manufacturing facilities are pretty inexpensive to ramp up, and in terms of logistic cost, might be a ripe opportunity to come back into this market. I know optical seems like it is dying what with Sony & LG leaving Blu-ray, but just like the vinyl resurrection, and with the "You Own Nothing" of digital distribution, I fully expect a resurgence to physical media. Maybe I am the minority but I am picking up UHD disk and blu-rays and eschewing streaming both for the lack of ownership and the inherent quality discrepancy. Limited digital access is not ownership.

In terms of the gaming market, look at Limited Run Games, their whole business model is around physical media, I think the digital hold out addressable market increases despite the trend to streaming.

 

[TerryLaze]

There was an optical disc manufacturer near my hometown, it got converted to a city building (think the police took it over). These manufacturing facilities are pretty inexpensive to ramp up, and in terms of logistic cost, might be a ripe opportunity to come back into this market. I know optical seems like it is dying what with Sony & LG leaving Blu-ray, but just like the vinyl resurrection, and with the "You Own Nothing" of digital distribution, I fully expect a resurgence to physical media. Maybe I am the minority but I am picking up UHD disk and blu-rays and eschewing streaming both for the lack of ownership and the inherent quality discrepancy. Limited digital access is not ownership.

In terms of the gaming market, look at Limited Run Games, their whole business model is around physical media, I think the digital hold out addressable market increases despite the trend to streaming.

I agree with your sentiment but it's not like owning the physical media means that you own anything, as soon as the disc gets scratched or succumbs to bitrot it's gone, it's not like they are going to send you a new disc if the old one is broken, so you still "rent" the movie for the life time of the disc.

 

[dimar]

Personally for me, as soon as PS6 or whatever comes after loses physical media, that would be the end of buying a console.

 

[stonecarver]

This is just how it goes I guess but me I want a physical copy where I have the choice. I get from 2010 was my last boxed copy of a game and not because I change my buying habits but all the stores and Amazon stopped selling then. A few have came back to Amazon but only a handful and that's it.

A couple of weeks ago I had just said to my son hell if the world took a wrong turn at least we have enough boxed PC games and as long as you have your PS-5 games downloaded were good. The next day Sony went down and the stark reality hit for my son of it being only digital.

He sat there in disbelief as he didn't have the games downloaded and I quietly hummed right along like nothing happened.

Steam can also go down and unless you have your library of games downloaded and patched your also screwed. Having the actual DVD copy of games your good to go while the world bucks and kicks.

When Hollywood Video went under I bought out the whole store of there console games of there physical disks. If the world goes more nuts I'm good even if I can't get to the internet.

Steam is 100% backed up. 16TB but that's secure.

GOG games have all been downloaded for off line install.

Epic is my weak spot I must get them secured but working on it.

Yeah so if tariff's play a part on physical copies it has been pushing digital hard for the past 15 years nothing new.

We have to think having the physical copy is now changed into having your games backed up for re- installation.

What's going to be the kicker if prices rise off just digital purchases as an excuse of changes happening.

 

[cyrusfox]

I agree with your sentiment but it's not like owning the physical media means that you own anything, as soon as the disc gets scratched or succumbs to bitrot it's gone, it's not like they are going to send you a new disc if the old one is broken, so you still "rent" the movie for the life time of the disc.

Have you never heard of format shifting?

 

[BFG-9000]

Sheesh, all they would have to do is ship the machine here. Lots of plastic items are molded in the USA, because the raw materials aren't toxic (no hexavalent chrome in the plastic pellets for the EPA to fuss over) and ship more easily than the finished products, plus most of the machinery is automated so it's just cheaper and easier to make it all here.

Even the most notorious purveyors of China made goods such as Harbor Freight or Walmart sell plastic goods made in USA, like that free-with-purchase 5-gallon Harbor Freight bucket or blowmolded gas cans or Plano tackle boxes. Plastic Glocks made here though have their metal parts gas-nitrided, instead of the usual Tenifer in a salt bath because of environmental difficulties with the waste products.

As for discs, we already make the polycarbonate resin pellets for them here.

 

[TerryLaze]

Have you never heard of format shifting?

Yes, but then why be against all digital?
If you have to rip all of your physical media to turn them digital anyway then why not just skip the extra step.

Do what stonecarver did and have 16Tb+ of decrepitated game files sitting around on your hard drives, or update that 16tb+ every month or so.