WEBVTT - Tariffs and The End Of Affordable Computing w/ Steve Burke 0:00:02.520 --> 0:00:10.120 Also media coming up, Will Steve Burke of gamers Nexus 0:00:10.160 --> 0:00:14.240 be able to help d zitron understand tariffs? Should we 0:00:14.280 --> 0:00:17.520 treat Sam Altman's new startup like a venereal disease? 0:00:17.920 --> 0:00:20.080 And who is the mysterious. 0:00:19.480 --> 0:00:23.279 Identical man living in Kevin Russ's mirror? All this and 0:00:23.360 --> 0:00:28.880 more on this week's Better Offline. 0:00:32.440 --> 0:00:43.080 Good grief. 0:00:45.520 --> 0:00:47.720 That's right, you're listening to Better Offline. I'm your host 0:00:47.880 --> 0:00:50.000 ed Zititron. As a reminder, you're now able to buy 0:00:50.040 --> 0:00:52.480 Better Offline merch. Check the episode notes for a link. 0:00:52.520 --> 0:00:55.560 Of course, More importantly, today, I'm joined by Steve Burke, 0:00:55.600 --> 0:00:57.560 the host of the incredible Game is Next as someone 0:00:57.560 --> 0:00:59.960 I wanted them the shows since I started at Steve 0:01:00.080 --> 0:01:02.600 recently put a three hour long video called the Death 0:01:02.600 --> 0:01:04.960 of Affordable Computing, and it's the single best way of 0:01:04.959 --> 0:01:08.480 seeing anybody explain the current tariff situation. Steve, thank you 0:01:08.520 --> 0:01:09.040 for joining me. 0:01:09.280 --> 0:01:10.280 Oh thanks for having me. 0:01:10.360 --> 0:01:12.800 Yeah, I'm excited to talk more about it. 0:01:12.920 --> 0:01:14.840 So, is there any way you can break down in 0:01:14.920 --> 0:01:17.640 simple language how these tariffs actually work? 0:01:20.240 --> 0:01:25.800 I mean, effectively the tariffs are they're effectively attacks. Right, 0:01:25.880 --> 0:01:27.800 let's pay it on imports? So the goods come in 0:01:27.840 --> 0:01:31.679 from any other country that's potentially tariff and the company 0:01:31.720 --> 0:01:36.320 bringing those goods in has to pay some amount in 0:01:36.440 --> 0:01:39.440 order to complete bringing them in, and so that then 0:01:39.520 --> 0:01:42.039 gets passed on to somebody. Maybe they absorb some of 0:01:42.040 --> 0:01:44.319 the costs, maybe they increase the price of the product. 0:01:44.360 --> 0:01:47.480 But tariffs in general, of course not a new concept, 0:01:47.520 --> 0:01:52.320 and it's just this particular round of them has effected 0:01:52.320 --> 0:01:54.559 the computer hardware industry in a larger way. 0:01:55.040 --> 0:01:57.680 So they're paid by the people receiving the goods. So 0:01:57.760 --> 0:02:02.600 the computer so like height or CyberPower, whomever receiving a case, 0:02:02.680 --> 0:02:05.639 for example, would pay the tariff before they even shifted 0:02:05.680 --> 0:02:06.120 to someone. 0:02:06.680 --> 0:02:07.080 Correct. 0:02:07.120 --> 0:02:09.639 Yeah, I mean it's the same all the way down 0:02:09.720 --> 0:02:12.520 to the smallest companies. We spoke to Lewis Rossman as 0:02:12.560 --> 0:02:15.560 part of that piece. He's known best for probably right 0:02:15.600 --> 0:02:20.000 to Repair, and he's a good example where as a 0:02:20.040 --> 0:02:23.000 small repair shop in Austin, Texas. He's got maybe six 0:02:23.120 --> 0:02:26.400 or so employees. He personally doesn't, as he said in 0:02:26.440 --> 0:02:28.640 the video, bring them the goods, but he buys them 0:02:28.639 --> 0:02:32.280 from someone who does. So you know, then that person 0:02:32.320 --> 0:02:34.280 would be the one importing them in paying the tariff. 0:02:34.720 --> 0:02:36.600 So what made you want to make this video because 0:02:36.600 --> 0:02:38.679 you've done a good amount of PC industry stuff, but 0:02:38.760 --> 0:02:41.920 tarift feels like a jump from you. Not an allogical 0:02:41.960 --> 0:02:42.400 one though. 0:02:43.040 --> 0:02:43.800 Yeah, tariffs. 0:02:44.080 --> 0:02:49.360 It's a big topic and it was very challenging to 0:02:49.440 --> 0:02:54.240 try and approach because for us, the number one reason 0:02:54.320 --> 0:02:56.320 to get into it was just we're starting to see 0:02:56.320 --> 0:02:58.480 the impact on computer hardware and a lot of companies 0:02:58.480 --> 0:03:00.280 had things to say about it, so that was the 0:03:00.320 --> 0:03:05.239 obvious reason to maybe look into it. The hesitations from 0:03:05.280 --> 0:03:10.320 us initially were this is a topic that it's very 0:03:10.360 --> 0:03:13.560 difficult to completely isolate from politics, which we try to 0:03:13.600 --> 0:03:17.399 stay away from. But it's also important and it does 0:03:17.440 --> 0:03:20.440 affect what we talk about every day, which is value 0:03:20.480 --> 0:03:24.960 and pricing. But the other challenge is that this is 0:03:25.000 --> 0:03:28.200 not something where I can claim to be an expert, 0:03:28.240 --> 0:03:33.840 like global trade. You might imagine, Yeah. 0:03:32.520 --> 0:03:34.160 Yeah, it's a very large topic. 0:03:34.960 --> 0:03:38.560 But that made it interesting to us because it was 0:03:38.600 --> 0:03:42.760 one of those like, okay, so we're closer to where 0:03:42.840 --> 0:03:46.760 you might expect most viewers to be in terms of knowledge, 0:03:46.760 --> 0:03:49.760 where you're just getting the information daily, with the one 0:03:49.800 --> 0:03:52.440 exception that we might have better access to companies that 0:03:52.840 --> 0:03:55.120 do have a lot of experience with this stuff, and 0:03:55.200 --> 0:03:58.080 maybe no one person can break down global trade for us, 0:03:59.800 --> 0:04:03.400 and we've all seen economists on TV and whatever. But 0:04:03.520 --> 0:04:07.240 what we could get is people talking about just how 0:04:07.280 --> 0:04:09.960 does it affect them and their company and then hopefully 0:04:10.000 --> 0:04:13.520 with that put together a fuller picture that's a little 0:04:13.520 --> 0:04:16.080 more maybe like a pragmatic approach to it. So that 0:04:16.560 --> 0:04:18.000 was a yeah, that was the way to break it 0:04:18.040 --> 0:04:18.560 down for us. 0:04:18.640 --> 0:04:20.960 So for the listeners who haven't watched the video, and 0:04:21.000 --> 0:04:23.039 I say, this is someone who can barely make it 0:04:23.040 --> 0:04:24.920 through a half an hour video, watch the whole bloody thing. 0:04:26.040 --> 0:04:28.920 How what are the current effects? What are the things 0:04:29.000 --> 0:04:32.800 happening today? To say, PC manufacturers that people might not 0:04:32.920 --> 0:04:33.640 know about. 0:04:34.040 --> 0:04:37.400 It's interesting, so might not know about makes that interesting. 0:04:38.600 --> 0:04:41.200 The ones that people do know about. I'll keep brief here, 0:04:41.240 --> 0:04:46.080 but just days ago Microsoft moved to increase pricing of 0:04:46.120 --> 0:04:51.799 its xboxes. Logitech has increased prices of its peripheral components 0:04:51.880 --> 0:04:54.680 keyboards and mice and so forth. And this is something 0:04:54.720 --> 0:04:55.960 we're going to see a course here. 0:04:56.000 --> 0:04:56.960 I was just speaking to them. 0:04:57.000 --> 0:04:58.640 They're about to increase the price of some of their 0:04:58.640 --> 0:05:02.159 computer cases that we're in the process of reviewing, and 0:05:03.000 --> 0:05:04.880 that's kind of the obvious one of that's the one 0:05:04.920 --> 0:05:10.360 people expect. There's also and having listened to some of 0:05:10.400 --> 0:05:14.040 your previous episodes, I think this might be a topic 0:05:14.080 --> 0:05:17.520 you'd want to get into. But there's also some room 0:05:17.640 --> 0:05:21.039 for greed, corporate greed where this is a great cover 0:05:21.120 --> 0:05:25.200 story for them to change some prices. But then as 0:05:25.240 --> 0:05:27.799 far as answer the question like what effects might people 0:05:27.920 --> 0:05:31.440 not know about, I think there's there's some really interesting 0:05:31.520 --> 0:05:36.800 ones sort of downchain in the in the supply chain, 0:05:36.839 --> 0:05:45.239 where things like logistics and freight and shipping companies are 0:05:45.880 --> 0:05:49.520 starting to have to deal with potentially reduced hours. And 0:05:49.600 --> 0:05:51.640 so you think about the supply chain, like to get 0:05:51.760 --> 0:05:54.560 a product from a country to another country, you know, 0:05:54.680 --> 0:05:58.120 just to make it in say China, a motherboard might 0:05:58.120 --> 0:06:01.080 require something like one hundred factories futality, all of them 0:06:01.160 --> 0:06:06.080 meaning including yeah, including the metals factories. And so you've 0:06:06.120 --> 0:06:10.880 got all those impacts, and then you have the freight 0:06:10.920 --> 0:06:14.560 and the couriers, the port, the dock workers, the couriers 0:06:14.640 --> 0:06:17.400 on the other side, the warehouse workers. Right, it's just 0:06:17.400 --> 0:06:20.680 a huge chain, and it's really it can't be elastic. 0:06:20.720 --> 0:06:21.839 It's got to be pretty rigid. 0:06:22.960 --> 0:06:25.400 One of the interesting ones we're seeing though, is some 0:06:25.480 --> 0:06:28.839 of the factories from some of the companies I was 0:06:28.839 --> 0:06:32.360 just speaking with, are beginning to adjust their terms. So 0:06:32.520 --> 0:06:37.000 factories will allow terms of payment to be potentially partially 0:06:37.080 --> 0:06:40.080 upfront and partially on completion of order. Some of them 0:06:40.080 --> 0:06:42.799 are starting to adjust to frontload more of the upfront 0:06:42.839 --> 0:06:46.640 cost or all of it. And that's because they have 0:06:47.440 --> 0:06:51.560 kind of gotten scared of potential order abandonment. When companies 0:06:52.000 --> 0:06:55.159 can't afford the tariff, they abandon the container and stiff 0:06:55.200 --> 0:06:59.520 the factory. Yeah, and so that'll have this unseen impact later. 0:07:00.120 --> 0:07:02.240 It's going to affect the cost of money. Companies have 0:07:02.279 --> 0:07:03.719 to borrow money a lot of times to bring this 0:07:03.720 --> 0:07:05.600 stuff in. They have to pay more upfront. 0:07:05.720 --> 0:07:09.080 Oh, so I hope be borrowing more money upfront because otherwise, 0:07:10.480 --> 0:07:12.600 exactly the way, they won't be able to afford the 0:07:12.680 --> 0:07:14.720 orders that are now more expensive on the front end. 0:07:15.280 --> 0:07:18.119 Yeah, and then they pay interest for a longer period 0:07:18.160 --> 0:07:20.840 of time that gets factored in. So it's just really 0:07:20.880 --> 0:07:24.080 like the more you talk to people, the more there's 0:07:24.120 --> 0:07:26.800 all these hidden consequences that pop up. And the one 0:07:26.840 --> 0:07:30.400 thing everyone kind of drove home was. It's not to 0:07:30.520 --> 0:07:33.640 them the tariffs themselves that are necessarily the problem. It's 0:07:33.640 --> 0:07:36.360 sort of the way they were being rolled out where 0:07:36.360 --> 0:07:39.720 it was at least for a couple of weeks. They're 0:07:39.800 --> 0:07:41.920 nearly daily changes and unpredictable. 0:07:42.240 --> 0:07:45.280 I did like during the video watching as you went 0:07:45.400 --> 0:07:49.080 from from person to person saying, Okay, right now, this 0:07:49.200 --> 0:07:52.800 tariff is this By the end of this conversation, it 0:07:52.880 --> 0:07:56.920 may not be. Yeah, insane way to run global trade. 0:07:57.240 --> 0:07:59.480 You had a few examples as well where it kind 0:07:59.520 --> 0:08:01.880 of looked like certain things would just doubling cost for 0:08:01.920 --> 0:08:05.520 the company, that they would just be paying effectively nearly double, 0:08:05.600 --> 0:08:07.400 or like if it's one hundred and twenty bucks to 0:08:08.320 --> 0:08:10.840 buy something, they're paying one hundred bucks on top. How 0:08:10.920 --> 0:08:12.200 is any of this sustainable? 0:08:13.520 --> 0:08:21.160 I think, I mean, yeah, for the computer industry, I'm 0:08:21.200 --> 0:08:24.720 not sure that it is sustainable. There's already there's already 0:08:24.720 --> 0:08:29.440 been price creep that is not anything to do with tariffs. 0:08:29.720 --> 0:08:31.360 It's just over the last several years. 0:08:31.400 --> 0:08:35.040 The companies, Yeah, I mean, they've they have big markets 0:08:35.080 --> 0:08:38.040 to sell into, and so if you're a small time 0:08:38.080 --> 0:08:41.280 consumer or gammer, you use Adobe Premiere with the Kuduk 0:08:41.400 --> 0:08:44.200 GPU you're just not at the top of the priorities, 0:08:44.960 --> 0:08:47.360 and the only way to get closer to the top 0:08:47.440 --> 0:08:49.040 is to pay a whole hell of a lot more 0:08:49.280 --> 0:08:51.959 for the components. So like there's already been price creep. 0:08:52.360 --> 0:08:54.240 Well, when you say pay a lot more for the components, 0:08:54.240 --> 0:08:55.240 who's paying more there? 0:08:56.040 --> 0:08:57.280 It's it's the consumer. 0:08:57.400 --> 0:09:00.920 I mean, yeah, so it's really the high end stuff 0:09:01.000 --> 0:09:03.480 is the best you have. Why do you have to 0:09:03.520 --> 0:09:05.840 buy the more expensive stuff? Is it just that it 0:09:05.840 --> 0:09:07.960 will be the cheap ones are having to use lower 0:09:08.040 --> 0:09:10.720 quality components or is it something else? 0:09:10.960 --> 0:09:16.080 Well, it's it's interesting because it's almost like this question, 0:09:16.120 --> 0:09:21.720 I think, is it the real answer is that cheap 0:09:21.760 --> 0:09:26.640 stuff doesn't exist anymore? Huh, Like the cheap products are gone, 0:09:26.920 --> 0:09:29.760 and this is pre tariffs. This is like it's only 0:09:29.800 --> 0:09:35.800 getting worse. But you look at GPUs, Nvidia, with its dominance, 0:09:35.880 --> 0:09:41.640 has has managed to slowly shift the low end into 0:09:41.720 --> 0:09:44.120 the mid range in terms of pricing, and the mid 0:09:44.200 --> 0:09:46.719 range into the high end in terms of pricing, but 0:09:46.760 --> 0:09:50.560 not in terms of necessarily performance scaling. And so you're 0:09:50.600 --> 0:09:54.560 already paying disproportionately more for what you're getting versus several 0:09:54.600 --> 0:09:58.800 years ago. And this is beyond inflation. This is beyond tariffs. 0:09:59.160 --> 0:10:02.520 You stack something massive tariffs on top of it, and 0:10:04.040 --> 0:10:08.240 people who are already kind of struggling to justify a 0:10:08.280 --> 0:10:12.040 purchase of an expensive GPU. I was looking at RTX 0:10:12.080 --> 0:10:13.800 fifty nineties, which are supposed to be about a two 0:10:13.800 --> 0:10:16.800 thousand dollars video card, about a week or two ago. 0:10:16.920 --> 0:10:20.800 I haven't checked today, but and the cards were typically 0:10:20.840 --> 0:10:23.199 in the twenty nine hundred to three hundred three thousand dollars. 0:10:23.040 --> 0:10:23.840 Rane of Jesus. 0:10:24.280 --> 0:10:29.560 Yeah, that includes on shelves at microcenters, and and some 0:10:29.640 --> 0:10:31.600 of that's going to be a tariff impact, and some 0:10:31.679 --> 0:10:34.120 of it is just kind of price creep. 0:10:45.880 --> 0:10:49.240 It does kind of feel like, well, to the title 0:10:49.280 --> 0:10:51.520 of the to the title of the video, it's like 0:10:51.880 --> 0:10:54.720 the end of affordable computing has already kind of happened, 0:10:54.720 --> 0:10:58.200 because it doesn't seem and for our less technical listeners, 0:10:58.240 --> 0:11:00.360 when we say fifty seventy fifty eight fifty night, you're 0:11:00.360 --> 0:11:03.880 referring to in videographics cards on the consumer side, so 0:11:03.920 --> 0:11:05.600 the things you put a computer so you can see 0:11:05.600 --> 0:11:08.200 what's on your monotone also play games. Stephen, sure you 0:11:08.200 --> 0:11:09.400 love that technical explanation. 0:11:09.760 --> 0:11:10.959 Yeah, it's great, but. 0:11:11.080 --> 0:11:14.760 It's I nearly said three DFX there for a second, 0:11:14.960 --> 0:11:19.480 aging myself, but it feels like those lower end ones 0:11:19.559 --> 0:11:21.560 aren't even anywhere near as good as you did a 0:11:21.600 --> 0:11:24.160 video on this as well, that the fifty seventy, fifty eighty, 0:11:24.679 --> 0:11:27.080 the lower end or mid range ones just on nowhere 0:11:27.080 --> 0:11:29.040 near as good as mid range and lower end used 0:11:29.040 --> 0:11:29.240 to be. 0:11:30.120 --> 0:11:37.720 Yeah, it's the I think the most understandable version of 0:11:37.720 --> 0:11:39.480 this in terms of when we were trying to figure 0:11:39.480 --> 0:11:42.640 out how do we communicate what's happening to people was 0:11:42.679 --> 0:11:45.400 we came to the word shrinkflation, which people are familiar with, 0:11:46.000 --> 0:11:48.360 except instead of a bag of chips, where you get. 0:11:48.240 --> 0:11:50.200 Well, maybe you should explain what it means? 0:11:50.679 --> 0:11:54.320 Just sure, yeah, yeah, So the concept being that, and 0:11:54.360 --> 0:11:57.480 again to breakface this, you know we're experts on hardware, 0:11:57.600 --> 0:12:00.520 not economy, but like this, this is that it all 0:12:00.559 --> 0:12:02.360 kind of bleeds together in a way we get familiar 0:12:02.400 --> 0:12:06.000 with it. But trinkflation being the concept of you go 0:12:06.080 --> 0:12:10.160 to a store to buy your bag of chips or 0:12:10.200 --> 0:12:14.160 your bundle of toilet paper or whatever, and you get 0:12:14.520 --> 0:12:18.120 fewer items for minimally the same cost as it used 0:12:18.160 --> 0:12:21.960 to be, right, So it sort of disguises the change 0:12:21.960 --> 0:12:24.720 in value, the cost per unit or whatever that you're getting. 0:12:25.360 --> 0:12:29.120 Then you apply this to electronics, and the version of 0:12:29.160 --> 0:12:34.439 it is you buy the video card or the CPU, 0:12:34.520 --> 0:12:38.679 and maybe you have fewer lower performance relatively speaking, than 0:12:38.720 --> 0:12:41.959 you would have had in previous generations, while still spending 0:12:42.280 --> 0:12:45.720 at least the same but likely more. And one of 0:12:45.720 --> 0:12:48.920 the things that you know, this kind of deviates from 0:12:48.920 --> 0:12:52.160 the tariff's discussion. But one of the things I'm concerned 0:12:52.160 --> 0:12:57.960 about is as cost for consumer electronics goes up, especially 0:12:58.400 --> 0:13:03.240 things like computers, and especially as caused by things like 0:13:03.240 --> 0:13:07.319 the current tariffs, there's an opening for companies like on 0:13:07.480 --> 0:13:12.960 Video to push for more of a lack of ownership model. 0:13:13.080 --> 0:13:16.640 So like they have services where you can play games 0:13:16.960 --> 0:13:21.920 over the internet streaming kind of like Netflix, that's right, Yeah, 0:13:22.120 --> 0:13:25.079 And this creates a great opening for these companies to 0:13:25.120 --> 0:13:28.160 step in and say, we're so sorry, you can't afford 0:13:28.200 --> 0:13:32.280 our cheapest model five hundred and fifty dollars video card 0:13:32.280 --> 0:13:35.960 to play games or to render videos, you know, or 0:13:36.000 --> 0:13:39.720 do three D modeling. But good news, we have something 0:13:39.760 --> 0:13:42.679 for you, and it's fifty dollars a month and you 0:13:42.720 --> 0:13:45.240 can use it for you know, this many hours and 0:13:45.280 --> 0:13:48.080 in between, maybe we'll do ads, or maybe we turn 0:13:48.160 --> 0:13:50.160 on and off the different services you have access to. 0:13:50.400 --> 0:13:52.440 And so that's one of my concerns is it's it's 0:13:52.480 --> 0:13:59.400 another step in furthering that you own nothingness of the 0:13:59.440 --> 0:14:00.920 current consumer economy. 0:14:01.320 --> 0:14:03.000 Yeah, it kind of feels as well. And you hint 0:14:03.120 --> 0:14:06.160 it hinted at it earlier as well, where it's like 0:14:07.280 --> 0:14:10.560 these companies are Microsoft's raising the price of the Xbox, 0:14:10.920 --> 0:14:13.960 I don't imagine that's coming down. I don't get this. 0:14:14.280 --> 0:14:16.560 I don't get the sense that Microsoft is going to say, 0:14:16.600 --> 0:14:20.200 don't worry everyone that everyone on Wall Street, by the way, 0:14:20.240 --> 0:14:23.880 they the markets love it when we charge less, so 0:14:23.920 --> 0:14:26.000 we're going to bring this down as an ethical company. 0:14:26.520 --> 0:14:29.440 It just feels like a that there are the immediate 0:14:29.800 --> 0:14:32.520 near term effects where its prices are going to increase, 0:14:32.560 --> 0:14:36.640 but just no one is going to like, no one's 0:14:36.640 --> 0:14:38.240 going to bring these prices back down at the end 0:14:38.280 --> 0:14:41.240 of the tariffs. No one really understands what's going on, 0:14:41.360 --> 0:14:43.400 so they it almost feels like they'll be able to 0:14:44.680 --> 0:14:47.040 kind of push it under the rug and obfuscate what 0:14:47.080 --> 0:14:48.400 they've actually done as well. 0:14:48.920 --> 0:14:53.040 Yeah, I think there's there's a couple of things going 0:14:53.040 --> 0:14:54.040 on where there's. 0:14:55.480 --> 0:14:56.160 It's interesting. 0:14:56.240 --> 0:15:01.080 Normally we as in GN we're in a very cynical 0:15:02.520 --> 0:15:04.720 mindset for a lot of our coverage, and that's just 0:15:05.000 --> 0:15:10.120 the nature of it. It's not necessarily adversarial, but it's untrusting, 0:15:10.160 --> 0:15:14.200 i would say, of what companies are saying. And so 0:15:14.360 --> 0:15:17.560 part of that in this situation is Okay, there are 0:15:18.160 --> 0:15:23.040 avenues here for companies to get the price increases they've wanted, 0:15:23.080 --> 0:15:26.320 but they've needed an opportunity to do it. But at 0:15:26.320 --> 0:15:29.360 the same time, unlike most the other stories we cover, 0:15:29.960 --> 0:15:33.840 this one is so wide reaching an industry impacting with 0:15:33.920 --> 0:15:39.160 the sort of sporadic nature of the tariff's application and 0:15:39.200 --> 0:15:42.720 also the high percentage of them that there are real 0:15:42.760 --> 0:15:46.560 consequences and it is hurting companies. So you've got this 0:15:47.480 --> 0:15:50.120 mix right where it's like, we can't be too cynical 0:15:50.200 --> 0:15:53.480 this time because there are real world impacts, like with height, 0:15:53.520 --> 0:15:56.720 where they were just going to lose money for computer 0:15:56.800 --> 0:15:59.000 cases that they sell if they continued to sell them 0:15:59.040 --> 0:16:00.000 into the US market. 0:16:00.160 --> 0:16:01.200 So they've abandoned it. 0:16:01.240 --> 0:16:03.960 They decided we don't need to sell the US, We'll 0:16:04.000 --> 0:16:05.480 send them somewhere else, which. 0:16:05.280 --> 0:16:08.720 Is crazy that's a large part of their business. 0:16:09.520 --> 0:16:10.280 Yeah, it was. 0:16:10.560 --> 0:16:14.320 I want to say the number the product director Rob 0:16:14.360 --> 0:16:17.160 Tyler shared during the interview, I think he said sixty 0:16:17.160 --> 0:16:19.200 five percent revenue was from the US. 0:16:19.920 --> 0:16:20.440 Yeah. 0:16:21.760 --> 0:16:23.440 But at the same time, you know, so that's a 0:16:23.520 --> 0:16:28.680 real That's where it's it's not helpful to be cynical 0:16:28.680 --> 0:16:31.200 because this is a real impact to this company. We've 0:16:31.240 --> 0:16:34.920 seen their numbers. But then on the flip side of that, 0:16:35.000 --> 0:16:36.760 back to the cynesism, you look at a company like 0:16:36.800 --> 0:16:39.720 Microsoft where they've increased not only the cost of their 0:16:39.760 --> 0:16:42.360 physical hardware, which is impacted by tariffs because it's a 0:16:42.400 --> 0:16:45.240 lot of it does come from China, but also they've 0:16:45.280 --> 0:16:48.160 increased the price of their digital downloads like video games, 0:16:48.520 --> 0:16:50.920 where they're saying they're going to start moving towards an 0:16:50.960 --> 0:16:56.480 eighty dollars per game model from typically sixty and digital 0:16:57.040 --> 0:16:59.440 video game downloads are not currently as far as I 0:16:59.480 --> 0:17:01.760 understand it, are not tariffed. 0:17:02.080 --> 0:17:05.840 No, in fact, but that's the whole point of digital downloads. 0:17:05.880 --> 0:17:10.160 That why they hate dollars. You're saving money selling this, right. 0:17:11.119 --> 0:17:15.000 And I think what's happening here is they have one 0:17:15.119 --> 0:17:17.800 real reason to increase the price, which is their cost 0:17:17.880 --> 0:17:24.399 has gone up on the hardware, and that is giving 0:17:24.440 --> 0:17:28.040 them sort of cover fire to also increase the price 0:17:28.080 --> 0:17:31.719 of things that haven't gone up. Maybe you could make 0:17:31.720 --> 0:17:35.159 an argument for inflation affecting development costs or something like this, 0:17:35.320 --> 0:17:38.199 but packaging it all together and doing it at the 0:17:38.200 --> 0:17:38.720 same time. 0:17:39.760 --> 0:17:45.000 I think it's also it sort of exhausts the. 0:17:44.960 --> 0:17:51.560 Consumer's attention where it eases the acceptance of this higher price, 0:17:51.600 --> 0:17:53.240 because at some point you get hit with this news 0:17:53.240 --> 0:17:55.359 so frequently, like I just I don't care anymore. 0:17:55.359 --> 0:17:55.720 I get it. 0:17:55.720 --> 0:17:58.080 It's all expensive, and you lose the capacity to be 0:17:58.080 --> 0:17:59.360 mad at a specific company. 0:18:00.200 --> 0:18:04.120 It's just I truly, I'm learning about this in real time. 0:18:04.200 --> 0:18:07.080 So Microsoft is raising the price of first party games 0:18:07.080 --> 0:18:10.639 to seventy nine to ninety nine. That's completely insane. And 0:18:11.200 --> 0:18:15.040 I think that there is a delineation of cynicism here 0:18:15.160 --> 0:18:18.120 where you can be cynical about a company. But all 0:18:18.160 --> 0:18:20.080 of the companies you talked to in this video were 0:18:20.160 --> 0:18:22.439 very much I mean, you had competitors hanging out with 0:18:22.480 --> 0:18:25.280 each other to tell you stuff. It feels like there 0:18:25.440 --> 0:18:29.400 is a marked difference between a company saying yeah, we 0:18:29.440 --> 0:18:32.200 are Every two minutes a wheel spins and we pay 0:18:32.240 --> 0:18:35.600 more on staff and having a real reason to do that, 0:18:35.600 --> 0:18:38.360 and a company just saying, yeah, games are eighty bucks. Now, 0:18:38.359 --> 0:18:40.679 I don't know what to tell your mate. 0:18:41.480 --> 0:18:41.680 Yeah. 0:18:42.000 --> 0:18:46.480 I think the companies we spoke to and they range, 0:18:46.520 --> 0:18:49.119 like I said, from someone with six employees who's a 0:18:49.280 --> 0:18:52.080 sort of true small business owner like that you think 0:18:52.119 --> 0:18:55.560 of an American small business owner, and that's exactly the 0:18:55.600 --> 0:18:59.760 representation you think of all the way up to multi 0:18:59.760 --> 0:19:05.520 billion dollar publicly traded course hair Components, which makes memory, keyboards, computers. 0:19:06.359 --> 0:19:10.600 They even have some assembly in the US, and all 0:19:10.640 --> 0:19:16.160 of them feel the impact in comparable ways, but where 0:19:16.160 --> 0:19:19.719 they differ is their ability to cope with it. And 0:19:19.760 --> 0:19:22.000 so I think it's these smaller companies that are going 0:19:22.080 --> 0:19:25.000 to get hit particularly hard. And as actually came up 0:19:25.040 --> 0:19:27.600 a couple times in the interviews as well. One of 0:19:27.640 --> 0:19:31.280 them that we didn't we didn't include was a comment 0:19:31.359 --> 0:19:35.920 that someone from Coursair made. I think we weren't filming yet, 0:19:35.920 --> 0:19:39.639 but we were talking about gn and my goal with 0:19:39.720 --> 0:19:44.560 this wasn't to insert ourselves into this story, so we 0:19:44.680 --> 0:19:47.080 kind of kept anything about gamers Nexus out of it. 0:19:47.119 --> 0:19:50.639 But the tariffs impact us too, and one of the 0:19:50.720 --> 0:19:53.400 comments he made. I asked him who do you think 0:19:53.960 --> 0:19:57.399 this affects the most? And he said, well, it's guys 0:19:57.440 --> 0:20:00.000 like you, right, Like, it's small businesses and medium size 0:20:00.160 --> 0:20:03.840 businesses because the big ones are large enough to have 0:20:03.960 --> 0:20:04.560 levers to. 0:20:04.520 --> 0:20:09.040 Pull, right. And I guess I'm going to ask you 0:20:09.080 --> 0:20:12.040 one of the most annoying questions that I possibly could, 0:20:12.080 --> 0:20:14.560 which is, and you do cover this in the video, 0:20:15.040 --> 0:20:17.520 why can't they just make in America? And I know 0:20:17.560 --> 0:20:20.240 that the answer is it's going to be very obvious, 0:20:20.280 --> 0:20:21.840 but still people are gonna want to hear it. 0:20:21.960 --> 0:20:25.760 Sure, Yeah, it's really It is actually a great question. 0:20:25.920 --> 0:20:34.679 It's obviously very common. It's complicated. So the easiest answer 0:20:34.680 --> 0:20:37.760 to that, I think if you try to boil it 0:20:37.800 --> 0:20:41.760 down into kind of like two components. There's cost, which 0:20:41.760 --> 0:20:43.600 are one's familiar with, and we can kind of get 0:20:43.600 --> 0:20:47.960 into that. So there's things like labor costs, real estate costs, 0:20:47.960 --> 0:20:51.919 all this, and there's maybe some greater social discussions to 0:20:51.960 --> 0:20:55.600 have there with regard to labor cost. But then there's 0:20:55.640 --> 0:21:00.000 also supply chain and so if we ignore the cost 0:21:00.119 --> 0:21:03.320 component for a moment and just assume it costs exactly 0:21:03.400 --> 0:21:05.560 the same amount of money to make it in China 0:21:05.680 --> 0:21:07.960 or Vietnam or Thailand as it does in the US, 0:21:08.280 --> 0:21:12.400 which will cost which it doesn't. It's the global manufacturing 0:21:13.240 --> 0:21:17.640 average cost in terms of wage per hour is, according 0:21:17.680 --> 0:21:20.360 to Courser's CEO and our interview, is two to four 0:21:20.400 --> 0:21:24.119 dollars per hour. Because it's obviously not even close. Yeah, 0:21:24.880 --> 0:21:28.080 and so if we just assume it's equal though for 0:21:28.240 --> 0:21:35.040 take conversation, the new challenge is in China in particular, 0:21:35.080 --> 0:21:38.720 but just that part of Asia in general, there's already 0:21:38.840 --> 0:21:41.800 a huge factory presence. They have the tooling, they have 0:21:41.920 --> 0:21:43.879 the people, they have supply chain, and so what that 0:21:43.920 --> 0:21:48.960 really means is you can go to Wachambai and Shenzhen 0:21:49.080 --> 0:21:53.000 right now and you can go talk to someone to 0:21:53.000 --> 0:21:55.720 get tell them you have this brilliant idea for a 0:21:55.720 --> 0:21:58.680 new electronic device. You can have someone designed the PCB, 0:21:59.400 --> 0:22:02.160 you can have someone print the PCB. The printing can 0:22:02.240 --> 0:22:06.240 be delivered same day for a prototype. And you can 0:22:06.280 --> 0:22:14.000 also start sourcing factories for the capacitors, the inductors, the semiconductors, 0:22:14.080 --> 0:22:17.359 the mos vats, the shell or case if there's going 0:22:17.440 --> 0:22:18.920 to be one. All of that can happen in the 0:22:18.960 --> 0:22:21.960 same spot and it can all be sourced from sort 0:22:21.960 --> 0:22:25.119 of the same, say fifty mile radius for the most part, 0:22:25.680 --> 0:22:29.119 and that doesn't exist in the US. And if you 0:22:29.160 --> 0:22:31.680 want to make a motherboard, as an example, that count 0:22:31.720 --> 0:22:33.880