I'm also trying to stay apolitical here, though a conversation around tariffs in today's environment, is going to end up somewhat political. Tariffs are implemented by politicians after all. I'm trying to remain politically agnostic as a fan of this game that we so love.
So, if I may share a breakdown of the math of board game production. Let's use COPD's MRSP of $34.99 USD as the basis.
The profit is shared between: Manufacturer (20% MRSP), Publisher (20% MRSP), Distributor (10% MRSP) & Retailer (50% MRSP).
So, a $34.99 expansion like COPD would be broken down as follows PER UNIT: $6.99 to the Chinese factory, $7.00 to Avalon Hill/Hasbro, $3.51 to the individual distributors (like Southern Hobby, ACD Distribution, etc.) and $17.49 to the individual retailers (Your friendly local game store, GameStop, EB Games, Amazon, etc.).
Tariffs to China right now (April 10) are being cited as +145% on China, and this tariff-tax is charged against the production cost at the time of entry into the USA. A 145% tariff on $6.99 brings the total manufacturing cost plus tariff to $17.13 ($6.99 manufacturing + $10.14 tariff).
With Hasbro's profit standing at $7.00 USD per unit, expecting Hasbro to pay the $10.14 tariff would mean they are LOSING money. It's just not going to happen.
Now, the publisher or retailer COULD just tack that $10.14 onto the MRSP, but that would mean the retailer is getting LESS THAN 50% gross profit on the MRSP - giving the retailer less room to offer sales, and making the purchase of inventory more risky. If I told you that you could make $20 on a $10 investment, you might consider it. If I told you, you could make $10 on a $15 investment, it's not as appealing. Retailers are less likely to carry product that is riskier. This isn't even accounting for the 10% blanket tariff for every other country that is going to make everything else more expensive. If a $10.14 tariff is added to COPD, the MRSP is likely to increase by MORE than that to cover the tariff and to keep the profit margin appealing to retailers. The double edged sword here is that the more expensive a product is, the less units they will anticipate selling. It's a delicate balancing act.
From the CEO of Cephalofair Games (Publishers of Gloomhaven) recently wrote on their blog:
"The impact that 104% tariffs will have on our industry, and our company, are nothing short of devastating and are already having immediate consequences that will be felt knowingly and unknowingly by everyone who enjoys this industry - from the hobbyist, the retail store owner, the publisher, and ultimately our communities."
Source:
https://cephalofair.com/blogs/blog/tari ... fair-gamesI'm generally not swayed by overly negative press. I've never been worried when people shouted, "is this the end of Heroquest?" But with what's going on with these tariffs, I'm not just worried about Heroquest, but the table top gaming industry as a whole.
I think we as a community may not yet understand how "devastating" this actually could be. I'm hearing major game designers and industry "insiders" are already being laid off and projects are being cancelled. This is not business as usual.
All that said, I'm hopeful that these tariffs are NOT here to stay, that a resolution comes soon, and that we can all go back to the gaming table to enjoy rolling some dice with the people we love.
As Mentor would say, "Until we meet again, take care my friends..."