Roger Miller from Revolution games posted the following on Consimworld:
Tariffs and Revolution Games is a big and complex issue that Richard and I have spent a ton of time on. So here is our take:
1. One problem is the constantly changing nature of tariffs. Both the amount and what nations are hit. With games having about a 4 month window to produce and get back to us, and that is the same amount of time for games produced in the US or China, its really impossible to make any plan. A business right now is just guessing and hoping when it puts a game into production and has no idea what the price of the game will be to import to the US or what counter tariffs will exist if we produce in the US and try to export games. So for now Revolution Games will slow production down, perhaps to a dead stop, till we get some stability. Fortunately our business plan has always beeen to keep almost everything in stock so we have a large back catalog available to sell and one new game, Gettysburg: The First Day on the way.
2. If the 54% tariff remained steady on China and the world economy was not tanking we could potentially still produce at that number with a significant cost increase. The tariff applies to the production cost, the freight on board invoice price, which is of course the single biggest cost of a game. But it does not increase the cost of ocean shipping, insurance, art, designer, storage, my modest income, etc. So its not like it increases our games price by 54%. It would be around 25%, or increases of $15 to $25 for most of our games prices. That however is a big deal. We had one game produced during COVID that was a lot more expensive to produce and we raised its price by $15. It's sales decreased by exactly the same percent so the price increase yielded no additional revenue. So just passing on the increased cost is not a sure bet at all. Gettysburg: The First Day will be the test run of this as we gambled and sent it to production in uncerain times. What the games price will be we will not know till we get the bill when it lands in port, late May our guess.
3. Tariffs are also paid all upfront while games sell over many years in our model. This means that our return on investment can be slower, even if ultimately profitable, and more cash is tied up in games. Short term not an issue as we have good cash reserves but over a number of years this would start to be an issue and put additional pressure on price.
This week's Live Cardboard (Thursday April 10) will be a roundtable on how the tariffs will affect the industry. Someone from Revolution will be there, and I hope to have 2 or 3 more publishers.
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