Tobold's Blog
Friday, April 11, 2025
 
A weird industry

Due to decades of globalisation, the USA does not have any big factory that would be able to make a board game, other than a pure card game. If you have 19th century images of a company in your mind, where the company offices are located right next to the factory making the goods, you couldn't be more wrong for the board game industry.

The typical reality of a crowdfunded board game might look like this: A Finnish company launching a crowdfunding campaign on a Polish crowdfunding platform. They get 2,000 backers for their $100 board game, of which half are in the USA. All the manufacturing of the game is done in China, and the project takes a year because of lots of back and forth of instructions being sent to the Chinese manufacturer, samples being sent back to Finland, and changes being demanded from the developers. The cost for making a $100 board game in China is about $20 just for manufacturing. But as there are tons of other costs for the whole chain from developer to publisher to distributor to retailer, the profit margin per board game is maybe just $10.

Now imagine this board game finished manufacturing today, and the Chinese manufacturer asks the Finnish game company for shipping instructions. Normally, 1,000 of those board games that cost $20 would go into a shipping container and be shipped to the USA. However, there is now a 145% tariff on this. And it isn't "China" paying that tariff, nor the Chinese manufacturer, but the company owning the goods, in this case the Finnish game company. Besides shipping cost, they would now have to pay an addition $29,000 on that shipment to the USA. Which is more than the $20,000 they made as a profit for the whole game worldwide. And probably more money than they actually have cash in hand as such a small business. For crowdfunding, which is based on customers paying way in advance, that is a huge problem. And it isn't just $29 per game more, because if the game costs more, everybody in the distribution chain also wants more money. It would be impossible to ask customers for $145 more, but at least for the next project that is what you would need to do to keep the same profit margin.

There are millions of dollars worth of crowdfunded board games currently in the period between having been funded and being produced and delivered. And with tariffs changing on a daily basis, nobody knows what to do. There is of course some chance that in a few weeks America and China come to an agreement and the trade war stops. But it is also possible that neither wants to show weakness, and tariffs stay as they are, or rise even further. And that would result in impossible business decisions for the companies that crowdfunded those board games. How are they going to finance those tariffs, when their customers have already paid in advance? How do you price your next crowdfunded board game, if you believe that tariffs are here to stay? Is a crowdfunding campaign still viable, if you decide that US customers have to pay the full effect of the tariffs, and many of them decide not to back you at that price?

While those tariffs won't directly affect the crowdfunded board games shipped to Europe, we need to remember that crowdfunding isn't legally the same are preordering. Backers don't have a legal right to the product. If a company would make a loss on a game or go bankrupt due to tariffs, it is completely possible that the game is never going to get shipped anywhere. Especially if the game company is American, it wouldn't go down well if they decide to fulfill their obligations only outside of America. If you can't afford to ship to the USA, and you don't see any future business, why still ship anywhere at all?

Right now, nothing much has happened yet. A Kickstarter board game project that launched this week only commented: "Tariff information is rapidly changing from day to day, we don't know where things will be a year from now when manufacturing is estimated to be complete. We will be monitoring the situation closely and maintain an open line of communication with backers." Companies that just finished manufacturing are currently just waiting for the situation to become clearer, before taking any business decisions. And as that isn't just the case for companies making board games, there are stories of Chinese warehouses rapidly filling up with goods nobody wants to ship at the current tariff. A board game isn't exactly the same as a toy, but in a similar category. 80% of toys sold in the USA are made in China. If you are American and have kids, you might want to do your Christmas toy shopping now.

Labels:


- posted by Tobold @ 8:33 PM Permanent Link
Comments:
Regardless of what happens with tariffs a lot of things are going to change with the global order. In my opinion, we went too far with globalization and now we are seeing the contraction that seemed almost inevitable. For me, how it's happening is surprising, not that it's happening. I, maybe naively, had thought that incentives would be given to entice manufactures to the US, not that we'd try and alienate the whole world. That hasn't worked for any nation in the past, why would it work now. Collaboration and compromise are what has already worked.

The US is the poster child for the globalization negatives now because of how bad we are acting at the moment. However, we cannot forget that the result of weakening globalization has been happening for years with migration being the spearhead. Brexit, Germany and France with their migration issues, the Chinese/Indian conflicts. Things have been getting worse for a while. It seems like we just decided to throw some fuel on the fire. Much more military conflict is next and then after tremendous devastation, a new world order will emerge. I think that it's possible to avoid that, but since compromise doesn't seem likely for some, I don't think it's probably that we will avoid it. Kickstarter games will be the least of our worries...
# posted by Blogger Janous : 12/4/25 14:55
 
Post a Comment

<< Home
‹Older

  Powered by Blogger   Free Page Rank Tool