"Tariff Effects on GMT Games" Topic

grognard.com had its weekly update today and this article about how the tariffs will affect GMT Games (a board wargame company) was included. I found it to be very comprehensive and unbiased. It spells out how the tariff is collected and how the costs could be handled. The most important immediate impact was paying for games that are in the process of shipping and how that affects the cash flow of a small company. It also spells out why the firm cannot simply have its material printed in the USA (low quality, out of date equipment, few firms, and either having too large of of print run to handle or too small to bother with). I thought this article may be of interest to those of us who also play the occasional board wargame.
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Yes, that was a very good explanation by GMT Games.

Jim

A good summary for consumers of the fustration, worry and extra work GMT and so many other businesses are going through right now.

If you've been following any of the discussions on BGG there have been several major Kickstarter projects that have collapsed, pretty much leaving gamers with nothing that they've already paid for. A few other game companies have simply closed their doors or filed bankruptcy. You quickly find out that most board game companies have their components produced in China as it costs way too much to produce them in the U.S. GMT is adding a small surcharge to the shipment that just came in, but the next batch of 14 games (I have three of them on pre-order) is really up in the air. They might be sitting in storage for a while.

You quickly find out that most board game companies have their components produced in China as it costs way too much to produce them in the U.S.

Better plan for the long term and find alternate supply chain countries and companies. What's happening is a long overdue correction in global trade where China has been waging a Cold War on the US, using unfair trade practices to gain wealth and power, and now the US is forcing countries to choose sides via a Trade War.

That Trade War could go HOT if the CCP lashes out before they fall, since the tariffs are having a very serious effect on the Chinese economy and the ability of the CCP to rule. So that will kinda screw up China production as well.

Planning for the long term is not an option for numerous smaller American businesses.

Long term is what this "correction" should be (which would also decrease any chances of things going 'hot'), not a sudden and catastrophic jolt to the worlds economy. Not everything can be fixed/changed with a metaphorical flick of the switch.

Thank You for posting and sharing. I know this is a very difficult issue that will have a significant impact on not just our gaming manufacturers but also our local game stores as supply starts to dry up and they find it difficult to restock. Nothing happens in a vacuum and you will likely see closures up and down the supply chain in our game industry/hobby affecting a great number of people.

Planning for the long term is not an option for numerous smaller American businesses.

Hasbro is. They have been shifting boardgame production from China to Vietnam, India and Mexico. Why not start dealing with boardgame manufacturers in those countries?

I'm throwing the BS flag on this.
The reason?
GMT is not getting jacked with 145% or more tariff fees.
That's bs UNLESS they filed and coded their export products from China to here UNDER THE WRONG CODE.

IF they did that, then it's not the administrations fault, tariffs fault, etc. It's theirs. And they're trying to suck more money out of you to cover their own eff up.

Here's another take on it, (With good points and examples backed up by numbers and data and stuff that nobody really pays attention to because it's easier and more entertaining to watch people scream on TV and da internets thing, than it is to look at factual numbers), on what's happened in the board game industry and why it's a dumpster fire right now.

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Plan for the long term?

How do you do that when you have a President who changes his mind daily on who gets tariffed and how much they get tariffed?

How do you do that when in less than two years one house, possibly both houses of Congress may be controlled by the opposite party?

How do you do that when no one knows the conditions that will result in the tariffs lessening, or even ending on any specific country?

No one is looking at building a factory in the U.S.(for all the obvious reasons). Companies are looking to build factories in Asian, and stable African countries (again, for all the obvious reasons) that are tariffed significantly less that their current locations.

Very few talk about the fact that printing is a very dirty, heavily polluting process. Companies went out of the US because the wages paid in China were lower as well as the cost to manufacture was lower due to much more lax pollution laws in China. I did business in Shanghai and the air was so thick with pollution you could literally look directly at the sun on bad days and not experience any effects.

Yes, there was a golden age of opportunity for people to get rich off the backs of near slave labor and pollution in China. However, wages were already pushing higher in China before the tariff war and resentment at having to live in a place where it hurts to breath was already growing in China.

I don't support the trade war as it seems to have been poorly planned and chaotically executed. That doesn't change the fact that the humongous surge in table top gaming was built on the backs of exploitation.

From a business perspective I see a lot of opportunity for companies to set up operations elsewhere (though I suspect most will be just as exploitative- just not in China). However, a lot of businesses will pay the price until that happens.

Hasbro is a $4.1 USD Billion revenue, $839 USD million operating profit entity with a market capitalization over $7 USD Billion and a global distribution and IP reach. They have more people on their Board than folks such as GMT or Compass have in their entire company and likely Hasbro in one month generates more revenue than all the small boardgames companies generate in a year, combined. Hasbro has the international legal expertise and financial ability to move sourcing both quickly and best case for them economically with immense bargaining power that firms such as GMT cannot dream of in their wildest fantasy.

Gene at GMT took no political opinion and merely described, in a very direct and honest fashion, both their challenges and their best choice solutions for his company and their customers.

@Murphy Did you read all the comments after that diatribe – which go a long way to debunk what was primarily an attack against one other company but concurrently called every other boardgame publisher incompetent. Mind you this is a guy who only has one game and at the end is hawking his book. So I would look at that with a grain of salt.

Someone pointed out that the MFN status codes have changed among other things. Frankly I find it hard to believe that a well-established company like GMT would overlook a shipping code if it meant saving their company and reputation among gamers.

They are playing tariff chicken right now. Seeing who blinks first. The only one who seems to be cranky is China. How long can the Yuan hold on?

TG, I know a company here that prints and cuts the tiles for Cataan. Not a dirty process. Just alot of thick stock and ink.

My comments weren't directed at GMT, just the nature of printing.

All printing is a dirty process. Sorry. Applying ink to that stock has a percentage of waste produced as a byproduct. It's the nature of printing.

I have direct experience with game printing in China, Indonesia, Europe and the USA. It doesn't matter where you do it, China or Vietnam or Italy, or Ohio. How you clean that up after is what costs. Chinese laws are more lax in regards to that clean up process resulting in cheaper costs to manufacture. They don't have the EPA and local groups breathing down their necks which means they don't have the same expenses.

The thriving board game renaissance is due to myriad tiny, creative companies. Most of which have 2–5 employees. They are getting hammered and do not have the resources for making long-term adjustments. Hasbro is it's own entity.

Products that were ordered and paid for before the sudden shift are now sitting in China because the small companies here simply cannot afford to pay the tariffs to get them delivered.

Layoffs and closures are the order of the day. Greater Than Games just shuttered:
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@McKinistry

Hasbro has the international legal expertise and financial ability to move sourcing both quickly and best case for them economically with immense bargaining power that firms such as GMT cannot dream of in their wildest fantasy.

ALL of our boardgame and RPG book production is a scrap of business, all of our production demands merely consumes the idle time graveyard shift hours and resources of the Chinese firms that manufacture 10 million copies of Candy Land every year.

But Hasbro is moving, they are diversifying to manufacturers in other countries. So why not start contacting them? They all have websites and inquiry forms, spend a few minutes asking for more info and bids. And I wasn't joking about the potential for a hot war or other disruptive event.

@Murphy

Wow, you are totally correct! That article lays it out and you can verify it with web search/AI search.

1. ALL of our boardgame industry products are HTS Code 9504.90.6000 – "Articles for arcade, table, or parlor games"
Tariff? 20%

2. All of our TTRPG gamebook products are HTS Code 4901.99.0070 (hardcover books) and HTS Code: 4901.99.0093 (softcover)
Tariff? 7.5%

So your full on blinged out box game tariff is 20%, and your cool hardback or softback TTRPG game book tariff is 7.5%

That article linked above seems to have some misinformation and is behind the rates as they continually change. True, Final Frontier Games had more than just tariff issues, but the large number of companies that have commented on this topic would seem to indicate it's not as easy as claiming a certain code and getting the tariffs knocked down to 20%. Many companies don't appear to be ripping off their customers or failed to fill out the right forms. Several are going to have their games stored overseas for now and wait for developments.

Thanks GamerTom for the article link!

BTW, regardless of the debate about tariffs, for American wargamers > the dollar is now sliding in value.

Reading Murphy's article I certainly did think: wow, what's all the fuss about?
But the comments do pick it to pieces, and a little research (SB…) does show it to be nonsense.
In particular, hts.usitc.gov, states the duties to be 40% for that HTS code, and further states:
"(current China tariff) in addition to all other applicable duties, taxes, fees, exactions, and charges"

After all, amongst all the folks in the boardgame world, they were 'all' wrong except that dude?

Yes, the comments do go against the writer of the article and it does seem like he has some axes to grind and a book to sell…
HOWEVER…
Two things stand out.

1: Tgerritsen said it correctly: "Very few talk about the fact that printing is a very dirty, heavily polluting process. Companies went out of the US because the wages paid in China were lower as well as the cost to manufacture was lower due to much more lax pollution laws in China. "

One thing that isn't also discussed is that printers are notoriously cheap, and problematic when paying designers for the products that they print.
Print shop needs a master for 1500 wedding invitations or 2500 bat mitzvah invitations. Print shop contacts local designer that does this for them. Orders the design to be made. Designer creates it. Then has to redo it 2-3 times (at least) because the date and times change, the location changes, the bride to be decides the she doesn't like "how the invitation looks" or they spelled her name wrong, etc.
Designer redesigns it, and gets all info correct, while printer keeps calling wanting to "when it's gonna be done".
Designer gets the design to the printer and gives him the invoice who then says "Oh yeah. I can't pay the full amount. I can only pay maybe a third of that and get you the rest in the next 3-5 weeks."
Welcome to the world of print design.

2: The board game industry has been digging it's own grave for a while now. Too many products at ever increasing prices, and size of the games. We've gone from Axis and Allies being 25-30 bucks when it first came out, (which was obscene back then), to various "editions" of it, running over 100 bucks each. Companies like FFG make games with so many parts and so huge in size that the cost of all that "stuff" is seriously factored in, (Twilight Imperium" or "Fury of Dracula" anyone?).
When you have a board game for 4-6 players that has a board that is 4-6 feet per side and a deck of 50-100 cards per players, plus game cards, event cards, tokens, etc. So many board games have now gotten so complicated they are practically unplayable, and like us here on TMP, many board gamers have SASS (Short Attention Span Syndrome). They are always on the lookout for the "new hot board game". A few years back at Gen Con it was "Mysterium". You couldn't get a copy of that thing if you sacrificed your neighbor to Gozer The Gozerian. Now, you can find it on sale at Wally World, or if you are luck, on the shelf at the local Goodwill for 10 bucks….

I agree with there bein way to much stuff with a board game now. I hate cards. Don't want event cards, character cards,
ect. Just let me roll some dice.

I think they've called it a Renaissance, and I certainly wouldn't want to see an industry diminished.

Be careful what you wish for, and find there's just too many axes to grind (but revenge porn is certainly on the rise these days).

That tariff post is wildly wrong.

The executive order is not a "normal" reciprocal tariff. It's a massive blanket tariff that the administration calls reciprocal to sell it to Americans. I just paid a tariff for product from the UK that used to be tariff free.

Might see a rise in print-it-yourself game products.

I've already done this with one boardgame, wasn't difficult, and the quality was quite good. If you can 3Dprint the figures/parts, and print the board (poster) at your local print shop…

I am calling on this, Murphy:

"We've gone from Axis and Allies being 25-30 bucks when it first came out, (which was obscene back then)"

25-30 was not unheard of in the 70s and 80s (I was buying games then). And it certainly wasn't obscene.