According to a report this week from Nikkei, growing number of tech companies are looking to move production out of China in the wake of the trade war and proposed tariff on Chinese manufactured consumer products. According to the report, a major shift in manufacture from China would “undermine [China’s] position as the world powerhouse for tech gadgets.” China is the world’s biggest producer of PCs and smartphones and a major producer of consoles.
Console companies Sony and Microsoft join a growing group of consumer electronics giants that includes HP, Dell, and Amazon. HP and Dell are the number one and number three producers of personal computers and command 40% of the PC market. 30% of Dell’s and HP’s laptop manufacture is planned to move outside of China. Other major PC companies like Lenovo Group and Acer are also considering relocating production, according to Nikkei’s report.
Microsoft and Sony join Nintendo in planning to shift manufacture to other Asian countries, with Nintendo rumored to be targeting Vietnam. The three console manufacturers issued a joint statement recently petitioning the Office of the U.S. Trade Representative under President Trump to exclude consoles from the list of goods subject to the proposed 25% tariff.
Nintendo is rumored to be gearing up to release new model for their Switch console, which may be a “mini” version. At this year’s E3, Microsoft announced plans to release their next-generation console, currently called “Project Scarlett,” in time for the Holiday 2020 season. Sony’s PlayStation 5 is speculated to release in the same window, but console costs are concern even when targeting a “hardcore” audience.
The increasingly popular plan to shift production due to the trade war between Washington and Beijing hasn’t changed despite the recent positive meeting between U.S. President Donald Trump and Chinese President Xi Jinping at last weekend’s Group of 20 summit in Osaka, Japan. Nikkei reports that the situation remains “uncertain,” especially as the overall cost of Chinese manufacture rises.
The manufacturing situation for companies producing consoles and personal computers may end up being a positive for the recently announced Google Stadia game streaming subscription service, which does not require home console or a high-powered gaming PC to play major upcoming titles. The possible increase in hardware costs could make Stadia’s grass a little greener, as long as internet service providers can keep up.