Tariff Hike Leaves Board Game Creators Staring Into Uncertainty

The board game industry has always been a place where creativity runs high, communities are close-knit, and profit margins are paper-thin. The industry also just got socked with a business sucker punch that many believe could well lead to its own destruction.

“The Future Is Grim” is a phrase that the design community is not accustomed to hearing from Jamey Stegmaier. This week, Stegmaier, the designer behind Scythe, Wingspan, Viticulture, and a string of other worldwide bestsellers, dropped that phrase, along with a gutting sense of dread over social media and a newly posted blog entry, after the Trump administration announced a new 54 percent tariff on all goods made in China and imported into the United States.

“I tried to work on a new game I’m brainstorming last night,” Stegmaier wrote on his blog, “but it’s really hard to do that when that future looks so grim. I mostly just found myself staring blankly at the enormity of the newly announced 54 percent tariff.”

The post was a shocker, and not just because it was so atypical coming from a designer of Stegmaier’s stature. It was a shocker because it’s how the majority of designers, publishers, and industry workers in the business are feeling right now.

A Globalized Supply Chain Stands to Be Shattered

When it comes to manufacturing, the United States is entirely dependent on China for board games.

Yes, there are board game manufacturers in other countries. Germany, the spiritual center of tabletop gaming in the modern age, has a number of domestic factories that board game companies work with. But none of them offer the all-in-one-stop-shopping appeal of Chinese factories. If you need printed cards, custom molded plastic miniatures, wooden tokens, die-cut boards, specialty dice and dice trays, and even the blister pack trays to package it all in, China is where you need to look.

It is possible, of course, to find domestic companies that can produce those components in the U.S. It’s just that it’s incredibly cost prohibitive, a fact Stegmaier bemoaned a few years ago in a separate blog post when, after much research and reaching out, he was quoted $10 by a domestic manufacturer for the sole service of printing a blank, empty game box. To be fair, that $10 price tag would also cover the production and packaging of a complete game from a Chinese factory.

Thus, this tariff just completely upends the industry. For years, most U.S. board game publishers, especially smaller and mid-size ones, have been hanging on by a financial thread. The cost of manufacturing a game, given the volume the larger publishers produce at, gets to a point that works out to be about a buck a game. This new tariff now, without any lead-in period to adjust, doubles the costs.

Needless to say, the industry is in a tizzy, to say the least, and many high-profile figures in the industry have come forward to voice their distress.

“It’s that bad” is how Steve Jackson Games CEO Meredith Placko put it in a blog post of her own that was as bleak as Stegmaier’s. Jackson Games, whose most famous properties are likely the Munchkin line, is in the same position as almost every other board game publisher in that it has no choice but to manufacture in other countries.

“The reasons every other company in the industry does this are the same reasons SJG does it,” Placko wrote. “But that doesn’t make it hurt any less when the choice is taken away.”

Rob Daviau, the co-founder of Restoration Games and a designer best known for Pandemic Legacy, is a high-profile designer who has sounded the alarm loudly for months now. Daviau has been a regular on social media about the coming tariffs, regularly calling almost every business meeting he’s had this year “an existential crisis about our industry.” In a recent interview with BoardGameWire, Daviau speculated that we’ll see a “great collapse in the hobby gaming market in the US” should tariffs as heavy as 54 percent take effect.

It’s not just publishers who stand to lose. Gamers stand to lose as well, as in addition to some games likely being worse quality in an effort to make up the margins or even fewer games being released at all, retail prices are likely to see a major spike as well.

Local game stores also face an uncertain future in this, since the already uphill battle against online stores likely will see more and more gamers playing off of games they already own (many with unplayed games on what fans euphemistically call their “shelves of shame”) or buying games from Amazon and elsewhere at lower prices.

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

Some Passages Offer Little Relief, and Many Anger

To be sure, there are some routes some publishers may be able to take to shield their incoming shipments from the tariff’s full brunt. Some may have the ability to go through a non-U.S. distributor to some extent. The European market, for example, which will still see a tariff but a much reduced one of 25 percent, stands to take a lot less of a hit.

But again, for American companies producing games primarily for the U.S. market, the price increase still looms large. “I can tell you that the United States is where I sell the most games, and that’s 65 percent of my total sales volume,” Stegmaier tweeted out, “so for me this is a hit. A big one.”

Even more galling to publishers is the fact that the timing is atrocious. For games still in design or very early production, there’s still a chance to make adjustments to some extent within a project’s overall budget. But for games already made and on their way from China, there’s little a company can do to avoid a tariff at this point.

California-based Chris Solis, the head of Solis Game Studio, had a particularly rough week after the tariff was announced. “I have 8,000 games leaving a factory in China this week,” he said in a social media post, “and now need to scramble to cover the import bill.”

The board game industry has banded together in a unified call for relief as well, though it appears to be largely falling on deaf ears. The Game Manufacturers Association (GAMA), the industry’s trade group that represents most board game publishers, has been lobbying against the tariffs publicly and directly with the Trump administration. So far, that doesn’t seem to have made any difference, though.

It’s a Crisis on All Fronts

The board game industry was already in a deep bind before this announcement, to be sure. A number of high-profile companies in the space have gone under or suffered major losses in the last two years, including MiniKits and Fantasy Flight Games. Others were hanging on by a thread financially, though most managed to eke by on comparatively paper-thin margins.

Few had planned for a wholesale reshaping of their business to this scale this fast. In Stegmaier’s own words, it’s a “perfect storm of existential business threats,” from Amazon/Amazon-exclusive pressures to rising printing/material costs to a general political zeitgeist that doesn’t bode well for indie/small company projects.

All in all, the modern board game industry is at a crossroads as we enter 2020, with a resounding sense of dread in the air. An industry built on joy and community now, it seems, is in for a very uncertain future.