0:00

Hello and welcome to World Business Report

0:02

on the BBC World Service. I'm Will

0:04

Bain. Thanks for being back with us

0:06

on the programme. Coming up today, two

0:08

countries who've borne some of the stiffest

0:11

trade tariffs so far have perhaps been

0:13

commiserating, but more importantly, consolidating their ties

0:15

and talking about what comes next. So

0:17

for Vietnam, seizing things with it

0:19

presents both a risk and an

0:21

opportunity. Yeah, we'll hear more about

0:23

President Xi of China's trip to

0:25

Vietnam in just a moment. And

0:28

we're here too, why Japan. Sony

0:30

says it thinks tariffs will mean

0:32

more expensive PlayStation consoles all around

0:34

the world in the future. And

0:36

away from tariffs, a record amount

0:38

of money was sent back to

0:40

Pakistan in the form of remittances

0:42

from expats abroad. But is that

0:44

boosting Pakistan's economy. It's not boosting it

0:46

at all. It's basically a fostering

0:48

consumption and future it can also

0:50

lead to an increase in inflationary

0:53

pressures. All that to come here

0:55

on World Business Report before you

0:57

leave you in the next half

0:59

hour. The trade war and tariff

1:01

war will produce no winner. and

1:03

protectionism will lead nowhere. Those were

1:05

the words of the Chinese leader

1:07

Shizing Ping in Vietnamese media Monday

1:09

as he kicked off a tour

1:11

of East Asian neighbours including Cambodia

1:13

and Malaysia as well as today's

1:15

hosts Vietnam. Against the backdrop of

1:17

ostensibly frozen trade between the world's

1:19

two largest economies after Beijing responded

1:21

to US tariffs on imports of

1:23

Chinese goods of 125% by imposing

1:26

the same import tax in return

1:28

on US goods to China. President

1:30

G set out on his first

1:32

foreign trip of the year against

1:34

that backdrop to meet other export-minded

1:36

friends to discuss a path forward.

1:38

And what does it mean for

1:40

a country that's seemingly caught in

1:42

the middle? Vietnam's biggest trading partner,

1:44

for example, is China, but its biggest

1:46

export market, the United States. Our

1:49

colleagues at the marketplace program here

1:51

at the BBC Business Unit, have

1:53

been speaking to Adam Sikkow, who's

1:55

executive director of the US Chamber

1:58

of Commerce in Vietnam about Watson.

2:00

stake. China is a major market

2:02

for Vietnam's agricultural products and Vietnam imports

2:04

a lot of raw materials from China

2:06

for the many factories that drive exports

2:09

to the US. An example of that

2:11

is that about 70 to 80% of

2:13

raw materials for Vietnamese apparel that heads

2:16

to the US market comes in here

2:18

from China and that's the same with

2:20

electronics and other goods. So all this

2:23

is tied together. And you mentioned electronics

2:25

there. A bit of uncertainty over the

2:27

weekend. We've had this kind of temporary...

2:30

pause in US tariffs on semiconductors,

2:32

electronic goods, and then a suggestion

2:34

that that temporary pause might be

2:36

obviously very much that temporary. How

2:39

important is clarity in that area

2:41

to Vietnam and that part of

2:43

the world? I think it's very

2:46

important. I'll give you an example.

2:48

About a quarter of China's total

2:51

exports to the U.S. would be exempt

2:53

because of that waiving the electronics

2:55

from those terrorists. 64% of exports

2:58

to the U.S. from Taiwan would

3:00

be exempt from the terrorists. 44%

3:02

from Malaysia and around 30% from

3:05

both Vietnam and Thailand. So electronics

3:07

are made in this part of

3:09

the world. And so it's very

3:12

important. some confusion. I mean, the

3:14

present and some of his folks

3:16

obviously said in the past hours

3:19

that, well, actually, they're not really

3:21

being exempted those products. They're just

3:23

being moved into a different tariff

3:25

bucket. But, you know, in reality,

3:28

the U.S. is now negotiating with

3:30

the bond markets and with itself.

3:32

The rest of the world's going

3:34

to wait and see how this

3:36

plays out. I would like to

3:38

see fewer barriers and more free

3:40

trade because that's what I think

3:42

raises standard of livings around the

3:44

world. there of the U.S. Chamber

3:47

of Commerce in Hanoi, Vietnam-speaking-to-market places,

3:49

Luke Wilson. Well, for more on

3:51

the visit, we spoke to Sheehan-Newen-Huck,

3:53

a visiting fellow at the

3:55

Vietnam Studies Program at the

3:57

I-S. E-A-S-E-A-S-E-S-Iach Research Institute in...

4:00

people. I think it takes

4:02

a lot of time for

4:05

South Asian economies including Vietnam,

4:07

Malaysia and Cambodia, three

4:09

of China's destinations for

4:12

President Sizing Ping to

4:14

diversify from American markets.

4:16

But nevertheless, I think

4:18

the move... is already

4:20

in action and China's

4:22

Chinese president sitting pink

4:24

visit is very important

4:26

in I think in

4:29

three ways. First, Chinese

4:31

president sitting pink mind

4:33

one to reassure South

4:35

Asian economies that they would

4:37

not try to dumb their

4:39

underpriced products because of their

4:41

US tariff on South Asian

4:43

economies and competing with local

4:46

manufacturers. And second, China might

4:48

offer Soviet Asian economies and

4:50

Soviet Asian people can trust

4:52

China to get import stuff

4:54

from Soviet Asian economies. And

4:56

third, I think they want

4:59

to reassure about the political

5:01

compromise, if any, especially on

5:03

the South China Sea dispute,

5:05

so that so Asian economies

5:07

and so Asian people can

5:09

trust China more. And in

5:12

the sense can make China

5:14

and Asia closer to each

5:16

other, especially in... in the

5:18

very uncertain time of trade disruption.

5:20

The message that presidency wants to

5:23

show so is Asian public is

5:25

that China is the only adult

5:27

in the room and they want

5:29

to be a responsible stakeholder in

5:32

contrast to the recent disruption by

5:34

Trump's. quote unquote liberation day. So

5:36

I think this is very important

5:38

because they want to secure more

5:40

cooperation from its neighbours, including Vietnam,

5:43

which is China's biggest threat partner

5:45

in ASEAN. Is there a risk,

5:47

Dr. Zhang, that actually they kind

5:49

of stir up the trumpet administration here

5:51

by being seen to be talking with

5:54

the one country that has got those

5:56

tariffs coming into force in terms

5:58

of China? Well, I think Vietnam is...

6:00

space for balancing between great

6:02

powers is increasingly narrowing down.

6:04

So for Vietnam, seizing things

6:07

visit presents both a risk and

6:09

an opportunity. So the risk is

6:11

of course all of those trade

6:14

actions that Trump levies on China

6:16

would be seen as something, you

6:18

know, Vietnam moving closer to China

6:21

when Chinese president seizing Beijing is

6:23

Vietnam and asks the Vietnamese counterpart

6:25

to cooperate with China to tackle

6:28

the trade disruption. So that's the

6:30

one very important risk because Vietnam

6:32

depends so much on Americanism. But

6:35

the opportunity here is that China

6:37

is a very big market. So

6:39

if Vietnam cannot really depend on

6:42

American export market, maybe in the

6:44

next few years, and then the

6:46

only option for them is to

6:48

move to China. So I think

6:51

Vietnam would have to balance really

6:53

well in this discussion about the

6:55

risk, you know, angering Trump, and

6:57

the opportunity of moving closer to

7:00

Chinese biggest consumer market. difficult balancing

7:02

at that isn't it because we

7:04

know and we just heard from

7:06

the US American Chamber of Commerce

7:09

in Vietnam and Adam Sikkov a

7:11

lot of these companies doing the

7:13

exporting are actually big American firms

7:15

themselves from Vietnam. Yes obviously and

7:18

also it's very important to note

7:20

that the trade leadership between Vietnam

7:22

and China has grown exponentially in

7:24

the past few years and last

7:27

year they record a 260 billion

7:29

US dollar in trade volume. But

7:31

nevertheless, Vietnam actually has a huge

7:33

trade deficit with China, and which

7:36

actually creates an impression of Chinese goods,

7:38

resulting via Vietnam to re-export to the

7:40

United States. The center of this as

7:42

well, Dr. Chang, is this accusation, I

7:44

guess, from Peter Navarro, who's President Trump's

7:47

top trade advisory, he's basically seen by

7:49

a lot of people, as the architect

7:51

of a lot of this terrorist policy.

7:53

He wrote in the Financial Times last

7:55

week about what he calls trans shipping

7:58

shipping. He says we want to... hear

8:00

from countries including Cambodia Mexico and

8:02

Vietnam that you will stop allowing

8:04

China to evade U.S. tariffs. by

8:07

transshipping exports through your countries. Can

8:09

you just explain what Mr Navarro

8:11

means by transshipping and then your

8:13

assessment of whether that is a

8:16

fair criticism? What Peter Navaros said

8:18

is that the Chinese products are

8:20

made in China, then export to

8:23

Vietnam and doing just very superspatial

8:25

things in Vietnam and then relabel

8:27

it as made in Vietnam and

8:29

then re-exporting it to American market.

8:32

I think there's a lot of

8:34

research studies already debunked the... impression

8:36

made by Navarro that one-third of

8:38

Vietnamese sports are Chinese, I think

8:40

it's not true. And I really

8:43

want to see where the numbers

8:45

that Peter Navarro takes from. But

8:47

most of the Vietnamese manufacturing companies,

8:49

many of them are multinational companies,

8:51

many of them are Chinese as

8:54

well. But the thing is that

8:56

Vietnam import a lot of input

8:58

from China, and that creates a

9:00

trade deficit from Vietnam and China,

9:03

and then Vietnam use that to

9:05

manufacturing things and export to America.

9:07

And the impression is there, but

9:10

the reality is that Vietnam doesn't

9:12

really allow resulting Chinese goods via

9:15

Vietnam, and there's a lot of

9:17

creep. criminal actions against some companies

9:19

actually does but the numbers is

9:22

very very small. Our thanks to

9:24

Dr. Zhang Nguyen-Huk visiting fellow at the

9:26

Vietnam Studies Program at the IS EAS-E-A-S-E-S-S-E-S-S-E-S-E-S

9:29

research institute in Singapore there. Well let's

9:31

see how financial markets have kicked off

9:33

the week shall we as well and

9:35

not just stocks and share markets so

9:38

company equity markets but let's take a

9:40

look at what's going on with the

9:42

oil markets too because it's been an

9:44

interesting few days for that so Cornelia

9:47

Meyer the CEO and founder of my

9:49

resources is with us as is Jane

9:51

Sydenham Jane is the investment director at

9:53

Rathbones investment management thanks both for being

9:56

back with us on world business report

9:58

Jane why don't you pick a... first

10:00

of all because markets in the United

10:02

States are open for the first time

10:04

since the president sort of began to

10:07

try and sketch out some carve-outs I

10:09

guess for the tech sector in terms

10:11

of his tariff policy what's been the

10:13

stop market reaction to all of

10:16

that? Yeah reasonably positive so far with

10:18

the S&P 500s up about one and

10:20

a half percent in NASDAQ the technology

10:23

index is up just under two percent

10:25

I mean I think you know it

10:27

could have been more. I think if

10:30

Trump had said yes we're going to

10:32

roll back any increases on prices for

10:34

electronics completely as far as imports from

10:37

China are concerned so there's probably a

10:39

slightly more modest rise than there otherwise

10:41

might have been but generally a better

10:43

mood. And what about the picture here

10:46

in Europe earlier in the day Jane? Yeah,

10:48

I mean, you know, much more positive,

10:50

certainly, you know, markets, I mean, the

10:52

euro stocks index is up nearly 3%.

10:54

The euro has been stronger against the

10:57

dollar. I think there's, you know, there

10:59

is more of a sense of of

11:01

investors allocating more capital to Europe. They

11:04

feel a bit more comfortable at the

11:06

moment. Should be clear, though, these are

11:08

sort of still in regaining losses

11:10

territory, aren't sort of up overall

11:12

in the period from when these

11:14

tariffs were announced. Oh yes, I

11:16

mean it's very much recovery rather

11:18

than moving ahead. I think that's

11:21

right. It's more breathing out and

11:23

a little bit of relaxing rather

11:25

than pushing further. Good phrase there. Cordelia

11:27

Meyer. Is it breathing out in the

11:29

oil market today? So Brent crude, the

11:31

one that we kind of tracked the

11:34

most here on the program, up a

11:36

smidge today after lots of days of

11:38

losses. Is it a similar picture for

11:40

commodities as it is with... company stocks

11:42

and shares as well are kind of

11:45

okay we've got a bit more of

11:47

a picture here now we've got a

11:49

bit more of an assessment I don't

11:51

think so I think what you

11:53

see is you know markets always

11:55

overshoot right and when you saw

11:57

this especially these huge tariffs levied

11:59

on China markets reacted very

12:01

strongly because look at

12:04

it China is the

12:06

largest importer of crude.

12:08

So if there are

12:10

developments that adversely affect

12:12

the economy of the

12:14

largest import of a

12:16

commodity Obviously, the commodity

12:18

gets hit. That is

12:20

then exacerbated by the

12:22

general fear of a

12:25

recession. It is also

12:27

exacerbated by next month

12:29

OPEC putting an extra 400,000

12:31

barrels a day on the market.

12:33

So the news in terms of

12:36

oil price was not good. It

12:38

undershot, but it was tremendous volatility.

12:40

It came from 75 down to

12:42

below 60, and it's now at

12:45

65. The real issue here is

12:47

the volatility. That's a really important

12:49

point that you bought out in there,

12:51

Cornelia, as well. Just explain a little

12:53

bit more for people who don't follow

12:55

it as closely as you guys do

12:57

in terms of what they can extrapolate,

12:59

I suppose, about what it might mean

13:01

for the economy, where they are, where

13:03

they're living and where they're listening to

13:05

us today. The oil price has been

13:08

falling pretty steadily through all of this

13:10

process. And as you said, sort of

13:12

sparkinging fears that that that means that

13:14

companies are going to do the activity

13:16

that they that they use right just

13:18

explain that through yeah exactly you

13:21

know an economy that is going

13:23

gangbusters is good for the oil

13:25

prices good for oil demand interestingly

13:28

though i just got the latest

13:30

oil market monthly oil market report

13:32

out of OPEC And although they

13:34

were sort of facing everything, this

13:37

is the sort of cartel of

13:39

the biggest producers of oil in

13:41

the world. It's not a cartel,

13:43

it's the alliance of the biggest

13:45

producers. And their research basically showed

13:47

that they based it on March

13:49

and they only went down about

13:52

a hundred thousand barrels a day.

13:54

They said oil demand would grow

13:56

in March, they said by 1.4

13:58

million barrels a day. now they're

14:00

set by 1.3 million barrels a day

14:02

so they're playing it very very cautiously.

14:04

And so with your kind of economist

14:06

hat on rather than your kind of

14:08

former oil markets hat on what is

14:10

that telling you about what that's kind

14:13

of signaling for all of us listening

14:15

in terms of direction of the global

14:17

economy? Well to me it's

14:19

the direction of the global economies

14:21

that everybody is scared. Everybody is

14:24

scared about the global economy. You

14:26

have seen you look at gold.

14:29

There's huge inflows in gold. You

14:31

saw when the markets really tanked

14:33

earlier last week, there was a

14:36

selling of gold, which means people

14:38

were trying to meet their margin

14:40

calls. So everybody is sort of

14:43

sitting at the edge of their

14:45

seats. And I don't think the

14:48

global economy is at this point

14:50

in a happy place. as always for

14:52

your time. Cornelia, my other CEO and founder

14:54

of Maya, resources there. Jane, just to

14:56

that point that Cornelia was making at the

14:59

end there, also seeing that impact spread

15:01

across into currency markets as well, and that

15:03

can have a big impact again, regardless of

15:05

whether you're in the country where that particular

15:07

currency is, because particularly when it's the US

15:10

dollar, which is doing the sliding, we buy

15:12

a lot of the stuff that in

15:14

the world commodities like oil, all bought and

15:16

sold in dollars, for example. Yeah, I

15:18

mean these huge amounts of dollars move

15:21

around the world every single day to

15:23

buy, as you say, commodities, whether it's

15:25

oil, metals, food, all kinds of things.

15:27

So much trade is conducted in dollars,

15:30

so it's such an important. currency in

15:32

a reference point for the entire financial

15:34

system which is why this is why

15:36

everyone is is really quite sort of

15:39

shocked by what's going on at the

15:41

moment and they're all trying to understand

15:43

how it's going to play out. Right

15:45

and so again it speaks to what you

15:48

guys both said at the start really it's

15:50

that uncertainty again of the political direction of

15:52

the fact that the twists and terms are

15:54

coming so fast is what's kind of setting

15:57

that backdrop. Oh for sure I mean you know

15:59

the fact that... as we were saying

16:01

at the beginning of the program,

16:03

you know, semiconductors were being exempted,

16:05

then they're exempted, but with some

16:08

caveats, then, you know, Trump's saying

16:10

we're going to maybe put them

16:12

into a different bucket. It's this

16:14

constant, you know, shifting from one

16:16

position to another. Investors are finding

16:19

that really hard to cope with. Away

16:21

from tariffs directly, although, of course, they

16:23

are a company that are impacted by

16:25

exactly what you were just talking about,

16:28

Jane, that those former two important today

16:30

because its share price not kind of

16:32

rallying quite as much as some of

16:35

those other tech firms we talked about

16:37

and potentially that's because of the backdrop

16:39

of this enormous court case this antitrust

16:41

case that's launching in the US just

16:44

sketch out in sort of real layman's

16:46

terms what's at stake here Sure, so

16:48

Meta bought Instagram in 2012

16:51

and then WhatsApp in 2014,

16:53

which obviously gave it an

16:55

incredibly strong position in the

16:57

sort of messaging market. And

17:00

the Federal Trade Commission has

17:02

launched this case effectively saying

17:04

that that meta was intending

17:06

to create a monopoly and

17:09

put itself in such a

17:11

strong position that it was

17:13

unassailable. The interesting thing about

17:15

this is in the United

17:18

States competition law is all

17:20

about does it disadvantage the consumer?

17:22

In Europe and the UK it's

17:24

more about actual market share. So

17:26

the burden of proof is, you

17:29

know, is meta-dis advantaging consumers by

17:31

holding such a large market share

17:33

of the messaging arena? That's what's

17:35

got to be proved here. Yeah, fascinating and

17:38

pretty critical case that I'm sure Sam Fenwick

17:40

and the team on the late edition of

17:42

World Business Report and Business Matters at midnight,

17:44

GMT, 1 o'clock, BST, British summer time, a

17:47

little bit later on, we'll be chasing through

17:49

in more detail as and when we get

17:51

a bit more coming out from that court

17:53

case because it's literally just kicked off I

17:56

think in the last few minutes also. You're

17:58

with World Business Report on the BBC. world

18:00

service. Pakistanis, living outside the country,

18:02

sent a record $4.1 billion back

18:04

home in March as the economy

18:06

continues to try and make a

18:09

recovery after it came close to

18:11

defaulting on its international debt in

18:13

2022. Pakistan's central bank expects remittances

18:15

to hit $38 billion this year.

18:17

Haroon Sharif is a former Minister

18:19

of State of Pakistan and a

18:21

former chairman of its Board of

18:23

Investment. And we asked him whether

18:26

this money was coming from and

18:28

why it's so important to Pakistan.

18:30

Pakistan stands fifth in

18:32

the low and medium-sized

18:34

countries in the world

18:36

in terms of receiving

18:39

remittances. March was an

18:41

unusual month where the

18:43

remittances significantly rose and

18:45

there are four countries

18:47

which contribute to it

18:49

which is Saudi Arabia.

18:51

UAE, UK and the

18:54

US. Interestingly, the highest increase

18:56

is from the UK. So in

18:58

my opinion, there are four factors

19:00

to it. Number one, it is

19:03

the factor because in March it

19:05

was the holy festival of Eid

19:07

where lots of people send money

19:09

to their relatives. Number two,

19:12

the government has eased the

19:14

commissions and margins of banks

19:16

on receiving remittances. So lots

19:19

of people have stopped using

19:21

the informal channels and have

19:23

moved to the formal channels.

19:25

Third is that in the

19:28

past five years, the consumption

19:30

patterns have... change then you

19:32

know the middle and lower

19:34

level of income people's consumption

19:37

has eroded because of first

19:39

COVID then there was a shock

19:41

of floods and then there's a

19:44

very high inflation you know which

19:46

so people need needed more money

19:48

so there's a health factor coming

19:51

up from the UK or the

19:53

countries. Fourthly and finally you know

19:56

what I see is that this

19:58

is basically mostly going towards consumption

20:00

smoothing, not necessarily going towards

20:03

investments in Pakistan in productive

20:05

sectors. So you're saying these

20:07

are coming back and people

20:10

are using this really for everyday

20:12

spending for things like food,

20:14

electricity, schooling, all those kind of

20:16

things, basics, rather than it coming

20:19

back and it being invested in

20:21

a business, some infrastructure, expanding that

20:23

kind of thing. That's absolutely right.

20:26

You know, generally when remittances come

20:28

to a country it contributes to

20:30

GDP and the volume in Pakistan,

20:33

you know, the projected 38 billion

20:35

dollars, it is about 10% of

20:37

Pakistan's GDP. Now the second part

20:39

is it does help the government

20:42

which is you know in a

20:44

very tight balance of payment situation

20:46

that a foreign flow which is more

20:48

than foreign direct investment which is coming

20:51

in so they have you know foreign

20:53

currency to pay back but the real

20:55

crux is that the recipient who are

20:58

getting these remittances from relatives and

21:00

friends and family mostly are using

21:02

it for the consumption purposes. And

21:05

basically that goes in paying utility

21:07

bill, that goes in the transport

21:09

costs and also health expenditure. Now

21:12

these are the things where money

21:14

is actually going because people's you

21:16

know income levels have really really

21:19

struck hard in the past four

21:21

or five years because of shocks

21:23

exogenous shocks and you know internal

21:26

inflation shocks which I had mentioned.

21:28

But just to really spell it out

21:30

this is basically money that's just coming

21:32

in sort of ticking the economy over

21:35

rather than boosting it if you know

21:37

what I mean. Not at all, yeah,

21:39

it's not boosting it at all, but

21:42

it is helping the government pay its

21:44

bills, but it's basically, you know, fostering

21:46

consumption and future it can also lead

21:49

to an increase in inflationary pressures. Our

21:51

thanks to former Pakistani government minister Haroon

21:53

Sharif there. Now, Jane's still with us

21:56

from Rathbone's investment management here in the

21:58

UK and Jane talked a bit about... the kind

22:00

of big picture of

22:02

tariffs on the stock

22:05

market a little earlier.

22:07

Interesting to hear decisions

22:09

from individual companies starting to

22:11

drip through though as well,

22:14

including the maker of this.

22:16

Yeah, get ready for Price

22:18

Rises. If you're a fan

22:20

of it. Yeah, get ready for Price

22:23

Rises. If you're a fan of PlayStation,

22:25

video game. This came a little bit.

22:27

out the blue from Sony the maker

22:29

of the PlayStation but does kind of

22:32

follow an industry trend I guess but

22:34

interesting to hear companies sort of putting

22:36

their heads above the parapet and saying

22:38

it's tariffs and its prices are going up.

22:40

Yeah, I mean this is the first

22:43

sort of I guess major announcement really

22:45

from a brand that's kind of was

22:47

really well recognized on a global basis.

22:50

Sony, I talked about increasing the price

22:52

of the PlayStation by 25% and what's

22:54

interesting is that they've done this on

22:56

a global basis. So they've increased prices

22:59

in the UK, Europe, Middle East etc.

23:01

rather than just in relation to their

23:03

US customers and so they... clearly made

23:05

that choice. We've got to spread this

23:08

burden across everyone, otherwise we will just

23:10

lose all our US consumers. Yeah, another

23:12

big company, also a Japanese tech company,

23:14

Nintendo, of course going to be launching

23:17

a follow-up to its wildly successful switch,

23:19

a switch, it's going to be launching

23:21

a follow-up to its wildly successful switch,

23:24

a switch, a switch, it was planning,

23:26

this summer, all around the world. The

23:28

company said a couple of weeks ago,

23:30

I might remember, in the early days

23:33

of this tariff. as with the Deputy

23:35

Editor, at the website and news site

23:37

Nintendo Life. Alana, thanks so much for

23:39

being with us on World Business Report.

23:41

Hi, thanks for having New Orleans. A

23:44

bit of an industry trend then at

23:46

this point, and yet you've got a

23:48

little bit of cynicism about this,

23:50

right? A tiny bit, yes. I

23:52

think PlayStation's response this morning is

23:54

certainly indicative of a response to

23:56

the Tara situation, and Nintendo, as

23:58

you said earlier, they said that these

24:01

pricing is nothing to do with the terrorists

24:03

but of course they've hit the pause button

24:05

on the pre-orders in the US. They've gone

24:07

forward in the UK as per normal and

24:09

no changes on the price there so far

24:12

but the price on video games in particular

24:14

for the switch like one of the launch

24:16

titles Maria Cart World is the first Nintendo

24:18

80... pound or 74.99 pounds game or 80

24:21

dollar game for that company and that's what's

24:23

caused a few heads to turn there I

24:25

think. Yeah that point that Jay made a

24:27

lot just explain that for people because you

24:29

understand this industry so much better than all

24:32

the rest of us here is it in

24:34

response then that say Sony says all right

24:36

we're gonna sell the PlayStation at this price

24:38

everywhere because they're worried that what US consumers

24:40

would try and buy one from Europe and

24:43

that would kind of disturb their market in

24:45

some way if it was cheaper somewhere else?

24:47

Is that how it works? They'd want to

24:49

try and have a similar pricing as possible

24:52

across the board? I mean, potentially, I

24:54

mean, in response to that, actually, Nintendo

24:56

themselves in Japan, they have a... essentially

24:58

a region lock switch for Japanese only

25:00

consumers and people who can read Japanese

25:02

and that is cheaper than a US

25:04

version which they are also selling a

25:06

multi-language version in Japan so I think

25:09

it's like maybe a hundred dollars more

25:11

expensive off the top of my head

25:13

so that's a similar situation but for

25:15

Sony in particular like the price has

25:17

increased across the world but interestingly like

25:19

it stayed the same in the US

25:21

so you have to wonder if it

25:23

is trying to as you say even

25:26

the playing field a little bit and

25:28

stop people from importing for cheaper prices.

25:30

And we've talked a lot about this

25:32

trend on the programme alone as well,

25:34

the sort of shift to digitisation here,

25:36

maybe the move away long term these

25:38

companies from physical consoles. Do you think

25:40

things like tariffs would kind of incentivise

25:43

that push, I guess? Yeah, potentially, again,

25:45

say Nintendo's, a lot of their digital

25:47

games coming out on the switch too,

25:49

will be cheaper digitally than physically, in

25:51

some cases, five pounds or ten pounds,

25:53

and then you've got like the digital

25:55

upgrades for older switch games that will

25:57

cost a little bit of extra money.

25:59

as well. So it does look like there

26:02

is a general trend towards the digital market

26:04

nowadays and we've seen over the years that

26:06

digital games have been selling more and more

26:08

than physical year on year. So yeah I

26:10

think it's an inevitability at this point. Interesting

26:12

potential implications for gamers and of course for

26:15

global inflation just a great little snapshot

26:17

isn't it? Big thanks to Alana Hakes

26:19

the deputy editor at Nintendo Life and

26:21

to Jane Sydenum from Rathbone's Investment Management

26:23

Management Management and of course to all

26:25

of you for listening to World Business

26:27

business report.