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.

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.

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.

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.

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.”

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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