A week after Sony, Microsoft, and Nintendo joined tech companies in expressing their concerns over U.S. President Donald Trump’s trade dispute with China, a report claims that the trio is planning to curtail console production in the country.
According to Nikkei Asian Review (via Games Industry), the console manufacturers have joined the likes of Amazon, Dell, HP, and Google in scaling back Chinese production.
“The industry consensus is to move an average of some 30 percent of production out of China depending on how important the U.S. market is,” a supply chain analyst told Nikkei. “Everyone needs to come up with a plan. Apple is really the very last and the slowest to start formulating plans, while everyone else out there is much more aggressive.”
An official from the city of Chongqing, a hotspot for laptop production, said that the uncertainties caused by the trade war have contributed towards a drop in orders. Darson Chiu, an economist from the Taiwan Institute of Economic Research added that while products may become more expensive in the U.S., the Chinese economy will have to brace for major impact as companies shifting production will hamper economic growth and result in a loss of jobs.
Many hope that the recent G20 summit in Osaka, Japan, will cool things off between the U.S. and China but economists aren’t as hopeful.
“We think [the trade war] is going to be the big story of the next year, just as it was the big story of the last year,” Bank of America Merrill Lynch economist, Ethan Harris, told Fortune. He added that the G20 summit was merely “the eye of the storm.”
While Sony and Nintendo have yet to respond to the report, Microsoft has told Nikkei that it has “no active plans to withdraw manufacturing” from China.
[Source: Nikkei Asian Review, Fortune via Games Industry]
