The US-China trade war, the cost of paper, and the economics behind roleplaying games

Since early 2018, the United States has been in the grips of a trade war with China. A series of escalating tariff increases on imports between the two countries has hit both hard, along with the global economy. After a short truce, negotiations appear to have failed, and President Donald J. Trump has announced plans to increase tariffs on new categories of products to 25%.

Those categories include books, dice, cards, and miniatures: the core components of roleplaying games.

I spoke to a few of the people behind some of our favourite games to get their views on what impact the tariff increase might have on the RPG industry. What I got was a glimpse at the economics behind the games we play, and why the price of roleplaying games may be rising — for more complicated reasons.

What is going on?

The complexities of the US’s trade relations with China are beyond the scope of this article, so it’s not something I’m going to go into in any detail here. In short, the Trump administration is presently engaged in a trade war with China.

Here’s Vox’s take on the Trade War.

Essentially, the US has raised tariffs (i.e. taxes) on certain Chinese imports in an attempt to weaken the Chinese economy, ostensibly motivated by unethical practices in China. China has retaliated with its own tariffs on US imports. While there was briefly hope in the form of negotiations, these have broken down, and in the wake, the US has announced tariffs on further imports.

Now, for obvious reasons, what I’m going to talk about here is purely the effect of this trade war on roleplaying games. It would seem disingenuous, however, for me to venture into this subject without acknowledging the severity of the situation.

Tariffs on Chinese imports are already having an impact on American consumers, which will be particularly hard on the poorest citizens, and the hit to US exports is endangering the livelihoods of American farmers. This is to say nothing of other ills inflicted by the current administration. There’s a lot to worry about right now, and roleplaying games are the smallest part of it.

Nevertheless, roleplaying games are our focus here, so let’s talk about how the tariffs will affect them.

Who does this affect?

China is famous as a powerhouse of manufacture, and this plays a huge role in the hobby games industry. The majority of the components of boardgames and roleplaying games, from dice to GM screens, cardboard tokens to miniatures, are produced in China. The complexity of many modern boardgames is also often only possible because Chinese factories have developed the capability to produce all their components in a single place, and to do so cheaply enough to allow for the prices that gamers expect.

A stack of products for Modiphius' John Carter of Mars
Boxed games and accessories are often produced in China, which is able to manufacture those products at a cost that is acceptable to consumers.

But books are at the heart of roleplaying games, and in addition to its position in manufacturing, China also has a massive (and highly competitive) printing industry. Not all game books are printed in China, but a significant number are, and for those publishers, an unexpected increase in costs (due to hit as soon as the end of June) is a threatening prospect.

For 13th Age and GUMSHOE publisher, Pelgrane Press, this has come at a bad time. Co-owner, Cat Tobin, tells us that after years of printing exclusively in the United States, Pelgrane has just received its first print run from China. The company made the decision after its two US printers both raised their prices by between 10 and 15 percent, citing a worldwide paper shortage leading to rising paper costs.

The cost of paper is a subject I’m going to come back to.

Now, facing a possible 25% tariff on future books, Pelgrane, who have had poor experiences working with printers in other countries, will likely need to turn back to US printers, and may be forced to raise the price of their books. There are also limitations, should they choose to do so: US printers are often unable to produce heavy-duty GM screens, slipcases, and box sets, at prices that customers will be willing to pay, while Chinese printers have built up the capacity to do so.

“The range of products we’re able to make has just opened up to us, and now it’s suddenly been shut down,” Tobin says.

Industry veteran, Chaosium (Call of Cthulhu, RuneQuest), could well be hit hard as well. “The tariffs affect basically everything Chaosium produces, in one way or another,” company president, Rick Meints tells us. As the company prepares for this possibility, they’re looking at printers in a number of countries, including India, Indonesia, and Eastern Europe.

Covers for various RuneQuest and Call of Cthulhu RPG books on display in a game store.
Chaosium games like RuneQuest and Call of Cthulhu are largely printed in China.

Evil Hat Productions (Fate, Blades in the Dark) have had better luck in terms of timing, co-founder, Fred Hicks tells us. They print their books in the USA, and their latest run of dice and token products arrived from China before the tariffs entered the picture. Should the tariffs go into effect, they will have time to strategise before they need to restock.

Hicks is concerned, however, about what this could mean for new publishers, and fledgeling game makers: “It’s potentially disastrous for, say, folks who’ve Kickstarted a game that’s going to be manufactured in China but won’t be getting onto the water until after the tariffs are in effect. Suddenly finding out you need 25% more than you actually raised is seriously bad times, and if that’s an inaugural product for a fledgling publisher, it could kill the dream right then and there.”

What’s going to happen

We don’t yet know whether these tariffs will go into effect. One publisher seemed confident that they won’t. Others seemed certain that they would. Part of the problem is the unpredictability of the US president: we just don’t know when there will be a return to the negotiating table.

Some publishers are hoping that the Game Manufacturer’s Association (GAMA) will step in to lobby against these tariffs, as they have done before, possibly in conjunction with lobbyists from the more lucrative toy industry (whose products are also affected in this wave of tariffs).

Certainly, GAMA is concerned about the effects of these tariffs, and executive director, John Stacy, claims they are “doing what they can“, but with the possibility that the tariffs will come into effect at the end of June, there isn’t much time to mobilise before higher costs hit publishers.

One other hope I heard expressed is that other factors in the economy will serve to offset the trade war. As the Chinese Yuan strengthens against the US Dollar, for instance, Chinese manufacturers may be able to lower their prices to hold on to business from US companies hit by the tariffs.

But there’s a strong chance that publishers will face higher manufacturing costs.

How the cost is passed on

Profit margins in the RPG industry are extremely narrow, meaning that if publishers’ costs rise, they will almost certainly need to raise their prices. “A lot of companies will be crunching the numbers,” Meints predicts, “We hope not to have to raise our prices, but we want to make a living. That will be tougher with a 25% increase to the cost.”

If publishers have to raise their prices, then distributors will have to pass that cost on to retailers. For small retailers, this is potentially disastrous. An increase in cover prices at game stores is likely to turn customers to Amazon, whose scale puts it in a better position to withstand changes like this.

“Usually, at the end of the day, it’s the retailers that suffer,” Chris Birch, co-founder of Modiphius (Star Trek Adventures, Fallout: Wasteland Warfare), warns.

A fish-eyed photograph of a hobby shop, with boardgames set out on the table, and the blurred figure of a shopper picking out a game book.
Friendly local game stores could be hit hard by rising prices.

For everyone involved, a price increase will mean less room for other risks. Retailers will buy only products they know they can sell to customers at a profit, distributors will buy only what they can sell to retailers, publishers will make only what they can sell to distributors. Birch’s prediction seems likely: “This is going to make it worse for the games that aren’t in massive demand, and I don’t think it will matter at all to the games that are in massive demand.”

Even if these tariffs don’t go through, publishers seem to be shaken by the threat, and we will see them proceed more cautiously for as long as the present attitude of protectionism remains in the White House.

It has already affected the strategy at Evil Hat, as Fred Hicks tells us: “Certainly this President’s love of tariffs was somewhere in mind in our decision to pull back from board and card games. The possibility that this would hit the game industry was more when than if. Ultimately it was a safe bet that this administration was going to be more of an enemy to American businesses than any other.”

Boxed games by small publishers, like Alex Roberts’ recent, groundbreaking game, Star Crossed, are likely to become riskier endeavours if the trade war continues.

The cost of paper

Although the trade war was at the front of everyone’s mind, the concern in the back of everyone’s mind was a different one: the rising cost of paper. Most gamers don’t think too much about the cost of the raw materials behind our games, but it turns out to be a massive concern for the people making them, because it is a cost which is rising exponentially, and (with the possible exception of rising fuel prices), it seems to be the biggest factor behind rising prices in the industry.

There are a number of factors behind these rising costs. One industry report labelled it a “perfect storm” of environmental and social pressures. Storms are, in fact, a part of the problem: the last three years of violent storms in the US have hit the country’s paper mills hard, forcing many to close or halt production.

Simultaneously, concerns about climate change, and the resulting push away from plastic toward recyclable packaging have put stress on supplies of paper and pulp. Since producers of packaging can buy in massive quantities, this has raised the price of paper for book printers considerably.

Recyclable packaging is not the only ‘green’ issue here. Paper manufacture is a huge contributor to pollution, because the chemicals used to produce it are extremely environmentally harmful. If we see a global push against pollution — and with the threat of climate change, we have to hope we do — then a move to greener paper production will also raise costs.

Chris Birch points out that unless we develop cheaper ways to produce environmentally friendly games, we will inevitably see prices go up:

“The big push for recyclable and green products is going to kick off, especially with the huge pressure on us to change things or die. That price is going to be passed down to the consumer. It might be that we’ve been really lucky to be in this mega-consumer culture. Maybe that’s going to come to an end. It’s the price of saving the planet.”

What makes our games

The unstable nature of global politics makes it impossible to predict what is going to happen next. The tariffs may go ahead, or they may not. The trade war may change what publishers can make, or it might not. Maybe this will cause us to turn to PDFs and other digital formats, or maybe publishers will simply turn to other printers. The price of paper will almost certainly continue to rise, but it is hard to see how this might be offset by other factors.

But whatever happens, it’s going to ripple through game publishers, and distributors, and it will touch our friendly local game stores, and our favourite livestreamers, and our weekly game nights.

The global economics behind the games industry are often easy for us to ignore, as gamers, but the fact is that they shape the games we play. This trade war could give us a sharp lesson to that effect if we see prices rise and games not being made — or, worse, creators losing jobs, or companies closing their doors.

But the economics of our games are complicated. The people who make our games aren’t just thinking about tariffs and paper prices. They’re also thinking about the cost of fuel, the environmental impact of plastic, the unionisation of creative professionals, the strength of international currencies. None of which I thought about the last time I bought a book. I’ll probably think about it the next time.

Especially if the price seems a little steep.

Sincerest thanks to Cat Tobin, Chris Birch, Fred Hicks, and Rick Meints for taking the time to talk to us on this subject.

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12 thoughts on “The US-China trade war, the cost of paper, and the economics behind roleplaying games”

  1. It is laughable that the author of this article “knows” what the commodity price of paper will be in the coming years. The ability to predict commodity prices in the medium term (months) is low and is close to nonexistent for the long term.

    Many environmental axe grinders have predicted for decades (going back to the 1970s) that commodity prices would increase – and have lost repeatedly lost public bets on the matter. Paul R. Ehrlich is probably the best known example of an environmental axe grinder making the mistake of having specific predictions about the future blowing up. Look him up if you don’t believe me.

    Paper is a renewable resource. How renewable you ask. Alabama (where I was a business professor for 30+ years) gets tall trees in an open lot if you don’t mow it to the ground very five years. Plant a crop of pine trees for pulp and in a fairly short amount of time you get another crop of trees. Plant, cut, replant, etc…. and the cycle keeps going. Recycled paper for high end uses has been more expensive than using virgin raw materials for paper for a long time. Recycled paper for luxury products (like games) raises prices, not lowers them. Use fresh materials and raw materials prices fall.

    Here is what might happen if a 25% tariff gets slapped on China.
    Chinese Producers – might not increase prices at all, might increase them less than 25%, might increase 25%, or might increase > 25%.
    Publishers – first we don’t know if their costs increase at all – that depends on the producer. They in turn might not increase prices at all, might increase them less than 25%, might increase 25%, or might increase > 25%. But what is more likely is that they will seek other suppliers if their costs increase.
    Retailers – again may or may not pass along price increases.

    Tariff effects on end user prices are heavily studied in economics. There are always substitutions which take place if prices from one source increase substantially. If a category price increases substantially (i.e. printed material itself), then consumers substitute other things like pdfs for print.

    One thing I can absolutely guarantee you based on studies going back more than 100 years, the full cost of a tariff will not in the medium run (say 1-3 years) be as big as the full 25% tariff increase. People are remarkably adaptable in making adjustments in purchasing. Experts (producers and large scale buyers) are even more adaptable and nimble than individual consumers – they have more information sources and options.

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  2. Let’s recognize that players’ expectations are at least part of the problem, significantly fueled by lower-than-competitive costs from China.
    When I bought my first Dungeon Master’s Guide in 1979, I believe it was $25. (I think the PHB & MM were 20, while the DMG was 25.) In 2019 dollars, that’s $88! How many RPGs would you buy at $88 per book?
    Due to things like a complete disregard for environmental mitigation, brutally low wages, etc Chinese manufacturers are able to produce works that can retail profitably in the US (including shipping 7000 miles) for $50 or less! This brutally damaged the US printing industry for decades, which is only now bouncing back thanks to the cutting edge innovation of high-speed inkjet tech. The problem in the US today isn’t that US printers’ costs are too high to be competitive (as implied in this article), it’s that the remaining US printers have SO MUCH BUSINESS they cannot grow fast enough to accommodate it (annual growth rate of 7%+ annually, last I checked) and can therefore price their work preferentially.

    We all love cheap games. But let’s be clear that SOMEONE, somewhere is paying the part of the costs that we aren’t. Ultimately there will be a reconciliation.

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    1. I think it’s true that our expectation of the price of printed games will probably have to change, that it probably is inevitable, and might be ethical.

      I can’t help but think about what it will mean for the price of games back in South Africa (where I’m originally from). There, the combination of a weak currency and shipping costs mean that a PHB will cost you around R800-1000. That’s a huge chunk out of your average middle-class monthly income.

      Now, obviously, game books are a luxury product, and digital alternatives are more easily available now (though still pretty out of reach for most people who don’t earn dollars or pounds). And maybe we’ll just have to get used to it, and those of us who can afford to pay more should just suck it up and pay more.

      But it will mean that gaming will become increasingly unavailable to people who don’t earn the right kind of salary in a strong currency. And that would be a sad blow to the increasing diversity of gamers.

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    2. Hi Steve – I wanted to say that I agree that we may have been benefiting from cheap prices on all sorts of goods and some will balk at paying more for the games they love.

      But wanted to point out that the prices you quoted don’t seem to be correct.

      If you look over at the Acaeum.com – a site dedicated to collecting AD&D they have a catalogue page from a JC Penney’s ad (late 70s/early 1980s)showing the prices of the Players Handbook and DM’s Guide being $10.99 and $12.99 respectively.
      Here is the link to the ad:
      https://www.acaeum.com/forum/download/file.php?cache=1&id=141&mode=view

      At those prices the PHB would be closer to $34-35 and around $40 for the DMG in current money converting them from inflation. Those are both cheaper than the list price of the current 5e books ( $50) but more than what a person would pay on Amazon (around $30).

      Personally I have no problem paying full price for games like Call of Cthulhu through Chaosium or my current favorite Astonishing Swordsmen and Sorcerers of Hyperborea (which I believe are often printed in the US by North Wind) and doubt that an increase of $10 or so would keep me from buying a game.

      Though I imagine that it will impact the industry and hurt new players entering gaming or players with less cash to spend (I’m decades from being a poor college kid with limited cash reserves). If the list price on a hardcover book from a major publisher becomes $60 to $65 dollars it will definitely keep some new players alway and harm small games shops more than places like Amazon that will be able to sell them at prices very close to what they are now.

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    1. I don’t know, but I doubt it. Most print-on-demand services won’t be printing any single product at the scale to make it viable… I’ll see if I can find out for you!

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    2. Last thing I ordered from DriveThru was printed in the UK (where I am), so I assume they use local printers where possible?

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      1. Yes, shipping is slow and expensive, so it would make more sense to ship locally if possible.

        I recall that the paper on my last DriveThru order was also of a lower quality than the usual RPG manual style. I’m not sure if that’s standard, but I imagine it contributes to them being able to print lower volumes cost-effectively.

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  3. Interesting information, gave me a better understanding of the challenges publishers face. Would have been better if you left out the biased personal viewpoints of those you interviewed.

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