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Manufacturers Not Seeing Drastic Changes in the Supply Chain

With 10% tariffs set to go into effect in September, board game manufacturers say the US-China trade war isn’t causing a dramatic shift in the supply chain. 

And while some American publishers might have taken a ‘wait and see’ attitude over the coming months, manufacturers continue to produce a record number of games. 

Ning Pan, the director of Longpack Games, a Shanghai-based manufacturer, attributes this to the way the games are made. 

Large industries, like textiles or toys, can move easily from country to country because the infrastructure is already there. Hobby board game publishers don’t have as many options, as the manufacturers are concentrated in China, Europe and the US.

“Board games are complicated. They involve a lot of different material; paper, plastic,” said Pan. “So for the supply chain, it (tariffs) doesn’t have an immediate impact.”

And while Longpack did experience hesitancy from American publishers when the tariffs were proposed at 25%, Pan said, “With 10%? I think that pressure is almost gone.”

Pan said he suspects that publishers and manufacturers will work together to absorb the tariffs with price increases and discounts.

Longpack isn’t making any immediate changes to their business model due to the tariffs. But they are diversifying into related industries, having launched Longpack Toys in May. One of their first projects was Throw Throw Burrito, a toy-game hybrid from the makers of Exploding Kittens.

Pan thinks that large toy companies like Hasbro will bring the biggest changes to the supply chain. Hasbro has been very vocal about spreading their footprint into more countries. By the end of 2020, it says that only 50% of goods they make will come from China. That is down from the 75% now.

Pan thinks board game publishers will benefit from Hasbro’s expansions into non-chinese countries. But it won’t be immediate solution. Pan said it will take 3 to 5 years for ‘realistic’ production to start in other countries like Vietnam or Malaysia.

American publishers do have options in the US.

Ludofact, a family-owned German manufacturer, acquired the Jessup Paper Box in 2016 and now makes board games, puzzles and packaging at its Lafayette, Indiana plant. The US company has been ramping up production long before the tariffs were a thing.

And business is good, says board game account manager Andre Voest.

Last year, Ludofact USA produced over 1 million games in the US, including well-known titles like Catan, Terraforming Mars and others. That growth continued this year, as the company recently added a second work shift to handle demand.  

Voest said Ludofact USA is certainly seeing more interest in US manufacturing since the trade war started, but that hasn’t necessarily translated directly into increased business.

This might be attributed to Ludofact’s place in the market. “We are not going to be beating the target price of the cheapest manufacturer in China,” said Voest. Our goal is always to be best in class, to be the highest quality manufacturer.”

Voest says tariffs will come and go. So, he doesn’t think they are a going to create sustainable business for a US manufacturer. Ludofact always planned the US plant as an added value to its European customers, and an option for Americans.

“We hope to convince as many people as possible that US manufacturing for hobby games is not only possible, but a really great option,” he said.

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