Wednesday, October 20, 2010

China-US trade war and its impact on gaming

Of course any China-U.S. trade war would have immense impacts outside the small world of gaming, but this is a gaming blog so that's our focus here.

Over at the Desert News Jeff Thredgold makes this point: "However, there is an important and positive by-product of that undervalued yuan. Goods produced in China are more affordable to Americans, whether shopping at Walmart or Target or Forever 21 or other retailers.
The Chinese currency manipulation allows greater U.S. household purchasing power for Chinese-made goods … good news for U.S. households that are already under tremendous pressure from a very damaging recession and a weak U.S. economic recovery."

Bloomberg News reports:
Nobel Prize-winning economist Paul Krugman said China is headed for a “trade conflict” with the U.S. and other western countries as tensions rise about how to rebalance the global economy.

“What China is doing is functionally equivalent to having large export subsidies and large import tariffs,” Krugman, 57, said in a speech in the Free University in Berlin. “If it were doing that in the normal way, it would automatically be subject to large countervailing duties. And I think that’s going to happen at the rate we’re going.”

For quite some time I've thought that gamers were going to have to adjust their expectations on how much bling was in their games. The decade of the aughts brought us all sorts of terrific games packed to the gills with stuff such as Battlelore, War of the Ring, Tide of Iron and many more. It was also a decade that brought us highly detailed and already painted collectible miniatures in vast numbers used in everything from Dungeons & Dragons and Heroclix to Axis & Allies Miniatures and Heroscape.

As much as a 40% increase in the value of the Chinese currency to the US dollar might help the US in macro terms, let there be no mistaking its effect on game bits - there won't be many, any more. Indeed, some product line may simply become unaffordable to produce and others will ave to scale back considerably. I think collectible painted miniatures, in particular, may become obsolete.

We're already seeing some hints of the coming reality. Fantasy Flight Games is still struggling with finding a way to bring the Battlelore Core Set back to market at an economically doable price. It's latest stopgap is to "repurpose" excess inventory of French-language copies for the English-language market. A welcome development but obviously a stopgap.

We're also seeing plastic being replaced by cardboard in more games. In the latest versions of Axis & Allies, for example, the industrial sites and anti-aircraft guns have been changed to counters.

The bottom line is that players who like a box chock full of plastic are going to find the future very disappointing as China "rebalances" the value of its currency with the rest of the world.

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