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Arduboy Game Console Faces Shutdown Due to Trump-Era Tariffs
Kevin Bates, the entrepreneur behind the popular Arduboy handheld game console, is facing significant business challenges due to the resurgence of US tariffs on Chinese goods. Despite achieving viral success in 2014 with his innovative game-playing business card and transitioning to full-time operation in China, Bates now contends that these tariffs, implemented during the Trump administration, are threatening to shutter his company after a decade of operation. Just as his venture was nearing profitability and poised to introduce a new product for retail, the escalating import duties present an insurmountable obstacle.
Tariffs Undermine Arduboy’s Profitability
Speaking to The Verge, Bates explained that despite achieving over $1 million in lifetime sales for Arduboy, with significant growth in recent years (2023-2024), the imposition of a 104 percent tariff on goods from China is likely to spell the end for his business in its current form. He expressed frustration, stating, “I just like making circuit boards and helping people learn to code games. This is all too much,” indicating the overwhelming impact of the trade policy on his passion-driven enterprise.
US Manufacturing Not a Viable Alternative
Bates further elaborated on the impracticality of relocating manufacturing to the United States, even if he desired to align with the stated goals of proponents of tariffs aimed at boosting domestic production. He explained,
- Lack of US Manufacturers: “There are no manufacturers in the USA who would even answer an email to produce Arduboy, much less give a good price.”
- Unaffordable Domestic Production: Even if he were to assemble the devices himself, his estimated earnings would be minimal, around $10 per hour, while still facing high costs for components.
Limited Options for Survival
Faced with these economic realities, Bates outlined his limited courses of action to keep Arduboy afloat:
- Drastically increase prices for consumers.
- Find a circumvention strategy to bypass the tariffs.
- Discontinue the Arduboy product line entirely.
Miracle of Global Trade Threatened
Bates reflected on the unique circumstances that allowed Arduboy to exist in the first place, emphasizing, “The fact Arduboy could exist at all was kind of a miracle of global trade.” He highlighted the ability of an individual to produce and distribute a product internationally with modest profit margins, noting that his operational model did not require excessive markups for viability. His typical profit margins, he specified, ranged from 30 to 50 percent.
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Tariffs Erase Profit Margins, Retaliation Looms
The newly imposed US tariffs are projected to completely eliminate these already modest profit margins. Furthermore, Bates pointed out the detrimental impact of anticipated retaliatory tariffs from China, which would add a significant 34 percent levy on the US-made processor, the most expensive component within the Arduboy system.
Arduboy’s Future Uncertain
While expressing a faint hope that a larger entity might acquire Arduboy and continue its legacy, Bates acknowledged the unlikelihood of such a scenario in the current economic climate. He has already publicly declared Arduboy “dead” on professional networking platforms and online forums associated with the product. Concurrently, he has begun seeking new employment opportunities.
One Last Kickstarter, Looming Customs Fees
However, Bates clarified that Arduboy is not entirely defunct yet. He intends to launch a final crowdfunding campaign via Kickstarter for a USB-C enabled version of the device, featuring enhanced functionalities including a real-time clock, IR blaster, and link cable support. This plan hinges on finding a cost-effective shipping solution that avoids prohibitive pricing for consumers. He expressed concern that even the previous $99 Arduboy FX Special Edition was perceived as expensive and is reluctant to raise the price to $200 for a new iteration or burden customers with unexpected customs charges related to drop-shipping arrangements.
Seeking Warehouse Solution, Navigating Drop-Shipping
According to Bates, “The only realistic solution is to warehouse the inventory somewhere that doesn’t have Chinese import taxes, and drop ship everything.” He recounted discussions with his factory last year regarding this potential workaround, noting that they indicated a broader industry challenge and a commitment to finding a solution, though one has not yet materialized.
Import Taxes and Customs Delays Anticipated
Addressing pre-orders for new products like the banana-shaped Arduboy and remaining stock of the Arduboy FX Special Edition, Bates cautioned consumers about potential drop-shipping and associated customs fees. “I am planning to fulfill the orders but they may be drop shipped, so U.S. customers should be aware that import taxes may now apply,” he stated. He is also considering halting pre-orders for certain items due to slow sales.
De Minimis Exemption Removal Adds to Complexity
Bates further warned that packages could face delays at US customs due to the elimination of the de minimis exemption, which previously allowed low-value packages to enter the US without duties. “That’s going to impact everything from Shein to Temu to AliExpress, and honestly, it’s going to be chaos. U.S. customs isn’t ready for that volume,” he predicted, emphasizing the broader implications for international e-commerce.
Trade War a “Disaster” for Small Businesses
In summary, Bates characterized the trade policies as “an absolute unmitigated disaster for anyone without the ability to dramatically restructure,” underscoring the disproportionate impact on smaller businesses like his that operate with lean margins and global supply chains.
“I guess that’s the point,” he concluded, suggesting a deeper, perhaps intentional, consequence of the trade policies on businesses like Arduboy.