Whither Tariffs?

Not interested in politics here.   Only interested in options.   And really only one question.  What happens to wargames (and more importantly to wargame companies) if printed items are not granted a waiver to the potential 60% US tariffs that will go into place next year? 

In our position as a publisher and a printer I have the opportunity to talk to and do business with most of the wargame publishers in the US today.  They're generally a friendly bunch, and are very forthcoming with answers when you have questions.  So if someone has a good idea what to do if there are 60% tariffs, I'm sure all of us would like to hear about it.

In the past, the US might slap some tariffs on an industry in another country so that they could "level the playing field" for domestic producers.   Those producers sometimes used the relief to improve their operations, develop new products and generally find new ways to succeed.  Sometimes, they just rode the profits that the tariffs allowed them to make and when the tariffs were over, so was their company.  That is the same choice facing publishers and printers if these tariffs come into effect.

Focusing just on wargames, I am confident in saying that there is not a large domestic wargame producing industry in the US to protect.   I know of about half a dozen companies that concentrate on making wargames, and of those, a couple are part-timers, one does both games and more general printing, and even the stuff Blue Panther makes is not 100% wargames.   I know of one "larger" US producer in Michigan that is capable of large volume production of games.   So we're not talking about a measureable impact on national GDP.

What would tariffs do to game printing?  In the short term, prices may stay the same for a bit as people go through their inventory, but that new crowdfunded game you funded last week may not happen if they thought it would cost $10 to produce and now it will take $16 to import it.     Expect fewer, more expensive games.   Certainly less bling in games as companies try to find ways to reduce the tariff they have to pay.

So what is the stated purpose of the tariff?   The idea is to encourage companies that want to do business in the US to have their facilities in the US.   If tariffs are high, then you either won't sell or you'll open a facility somewhere in the US, employ some locals, and make your product here.   Will that work for games?  Hard to tell.   Some industries locate their facilities here because shipping is ridiculous - for example every auto company that sells in the US makes at least some of its models here too.   Games are not cars, although games seem to be getting heavier every time I look at crowdfunding.   And of course, the bestselling war game in the world may not even fill one container on a ship with its annual sales.  

If you look into the longterm demographic trends in China and other aging countries, it may not be feasible to produce there in the future whether or not tariffs are in place.  Just too many older people and not enough young ones to support them the way things have been going so far.

So what's a wargame publisher to do?  We do everything in the US.  Always have.  Our chipboard, our boxes, our paper - all of it is made in the US already.  In fact our major suppliers are within an hour's drive from us.  We keep raw inventory on hand and turn it into a finished game when you order it from us.   Is it the easiest way to do business?  Nope.  But it's the way Toyota and Dell do business.   It's called Lean Thinking.

Why do we do it this way?   Call it a different approach to managing risk.  We will probably sell every box and every piece of chipboard that gets turned into a countersheet - don't know what game it will be until you order it, but our process lets us convert raw parts into finished games pretty quickly.   If you get your games printed in China or Europe or elsewhere, you need to order a certain amount to make it worthwhile, then hope it all sells.  You have inventory that may or may not sell.  You also have a development cycle that takes months or even years.  You have to have alot of cash invested in the game before a single copy gets sold.   Your unit price is cheaper than mine - that's true, but only if you actually sell the vast majority of your games.   In other words, for many game companies, wargame companies included, things have sort of morphed into the "Hollywood blockbuster" model - a bunch of big budget, big income producing games and each one has to be bigger and better than the last.

My money is in the equipment and the people and the process.   On a given day we make make hundred of units for dozens of games.  There is an upfront cost to getting the equipment and ongoing costs to keep the equipment running well.  But I almost don't care what game it goes into, as long as it fits into one of our standard game formats - even then it's pretty easy for us to do lot size of one for custom countersheets or printed items (something our friends at Hollandspiele have proven many times over the last few years).

Will tariffs put some wargame companies out of business?  They sure could.   You can't adjust your entire supply chain as fast as a politician can pass a new law or regulation.  You can't relocate competence in game components easily - only a few places do a good job die-cutting for example.   And how many places actually make the dice?  Not that many. 

While most of our supply chain is in the US, there are still parts of the business that cannot be sourced in the US right now.  I have local seller and service for our printers - but there was an ink factory fire in Japan, and supplies were tight a few years ago regardless.   They don't make the type of lasers we  use in the US.  They don't make most of the printers either - and even if they did, it's likely the ink would be sourced from another country.   So even though our direct components may be immune to tariffs, the machines and the ink and the machine parts are not.  Not unless a domestic industrial printer industry develops.   Regardless of what any politician tells you, globalization has been around for decades and the benefits/problems can't be changed overnight no matter who is in charge.

If you run a wargame company, or any tabletop game company, and you are thinking perhaps the glory days are over, I'm here to tell you that even if tariffs go into place, you have options - more choices than you might think - our business model is scalable - you can clone our setup or do something like it or just take parts of it under your roof.   You may even be able to hire one or two people and get them excited about wargames too.   We wouldn't mind having some other wargame printers out here with us in the wilderness. 

More local printers means more wargames, and that's always a good thing.