The High Cost of Fun: Updated with a Statement from Microsoft

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Since yesterday, Microsoft has issued an official statement on the incident in Wuhan, as reported by Eurogamer:

“Microsoft takes working conditions in the factories that manufacture its products very seriously, and we are currently investigating this issue.

“We have a stringent Vendor Code of Conduct that spells out our expectations, and we monitor working conditions closely on an ongoing basis and address issues as they emerge. Microsoft is committed to the fair treatment and safety of workers employed by our vendors, and to ensuring conformance with Microsoft policy”

Original Story

When some of the hidden, real-world costs of the gaming industry we love come to light, it can be a little difficult to digest. In 2011, allegations of poor working conditions at L.A. Noire developer Team Bondi contributed to that studio’s financial doom and eventual closure later in the year.

Now we’ve gotten yet another glimpse behind the curtain, this time into the manufacturing side of things: according to a post on GamesIndustry, 300 employees at a Chinese factory working on constructing Xbox 360 consoles recently threatened mass suicide over poor conditions and broken promises.

The post explains that the workers were offered a choice between continuing to work at the plant, owned by electronics-manufacturing giant Foxconn, or being dismissed with compensation. After many employees took the latter option, the compensation offer was yanked away.

To protest Foxconn’s alleged deception, 300 workers moved to the roof of the plant and threatened group suicide. Apparently the situation became so dire that the mayor of Wuhan, the province in which the factory is located, had to come and try to talk the workers down.

As the post points out, Foxconn has been the subject of much scrutiny over the last few years because of the number of high-end products they make for Western consumers, as well as a spate of actual suicides by workers who were making Apple devices. To combat the phenomenon, the factory installed nets.

An interesting investigation of Foxconn’s factories and conditions by one writer in a Wired article from last year helps to shed some light on the source of the gadgets we all enjoy, and provides some real food for thought.

The post notes that Microsoft has yet to comment on this most recent incident, but offered a quote back in 2010 after similar problems at plants making their devices had arisen.

“Foxconn has been an important partner of ours and remains an important partner,” said Microsoft’s Phil Spencer. “I trust them as a responsible company to continue to evolve their process and work relationships. That is something we remain committed to—the safe and ethical treatment of people who build our products. That’s a core value of our company.”

It remains to be seen what, if anything, Microsoft will say or do to respond to what happened in Wuhan.

At this point, it’s impossible to claim ignorance about the source of our products. At the end of the 20th century, American companies began to send manufacturing jobs overseas, driving costs down and revenues up. That has meant less expensive goodies for us, but with lost manufacturing jobs in the United States. The effect was similarly double-sided in Asia: there are way more jobs there, but the demands of those jobs have kept conditions and pay below what they would be for the rest of the world.

It’s a conundrum in many ways…if manufacturing were brought back to the US, the cost of production would go up, and would likely result in higher costs for goods. But at the same time, the American manufacturing landscape would bloom and more people would have money in their pockets to actually buy things.

Another interesting Wired article tackles the issue of overseas manufacturing, and how American companies are starting to shift back to making things stateside. According to that article, overseas manufacturers seem to value quantity over quality, resulting in more incidences of defective products. That means American companies who thought they were saving money by outsourcing their manufacturing to other countries are suddenly paying exponentially higher, repeated shipping fees to compensate and replace the defective products—and with oil prices rising all the time, their outsourcing-based savings started to disappear.

So here’s the question: how important is price to you? I’ve made no secret of my wish for all kinds of cheap, shiny goodies, like a cheaper PlayStation Vita. And I totally took advantage of the cheaper Nintendo 3DS when the price dropped last summer. But would I be willing to shell out more money if I knew that my dollars were employing my fellow Americans? I’d like to say yes. And I think I will say yes—but that position is a luxury I can enjoy only because I haven’t been forced to contend with higher-priced, American-manufactured video game products.

Do you think about the ethics of your gaming hobby? I can honestly admit that I do, but not nearly enough. Would higher prices with more ethically made products be worth it to consumers? Or do you think higher prices—especially with a crummy economy—would be the death knell of the industry?

Via GamesIndustry, Wired, and Wired again

  1. The entire electronics industry is one vast sweat shop. In Africa, things are even worse:

    The way to fix this is to boycott, impose tariffs on companies that exploit their workers, and to make the formation of labor unions in developing nations a central part of the UN’s mission.

    Otherwise, this shit will just continue.

  2. Foxconn also makes apple products and there have been nine reported suicides because of those working conditions. Fucked up

  3. Hopefully the media can expose some of the worst offenders, so corporate giants become pressured into assuring the rights and working conditions of the end workers. Corporate giants like Microsoft and Apple could surely afford to have more employees and spread the work load in exchange for more positive public image?

    Unfortunately, this is how the world works with the entire greedy west, and cheap east idea. Nike having been forcing 12 year old’s in Pakistan to make footballs / soccer balls for as many decades back as they’ve existed.

  4. We know that bad things happen in China; Western tech giants should be taking a stand against this sort of behaviour, instead of endorsing it. Beyond this, it would also help with employment and recovery to economic prosperity; but I guess politicians don’t look that far forward.

  5. It’s awful that these kinds of things happen, and it’s a very sad reality to our capitalistic economy. Regards and prayers to the people that have suffered from these incidents.

    A question for the IGA editor: do you copy/paste these articles from the source or do you re-write them?

    • Copy / paste is called plagiarism, generally frowned upon in the writing professions.

      Anything in quotes comes from another source and should always be attributed as such. Otherwise it’s original writing credited to the author of the article.

  6. its hard to deny the mistreatment especially when it comes to the precious metals in these systems. the mines in Africa have gross mistreatment of workers). unfortunately even if gamers were to boycott ( which they probably wouldn’t) the rest of the electronics industry runs on them the only hope would be if the government set regulations which they won’t because the economy matters more than human rights and the environment. just saying

  7. I hate when people around here look down on eastern countries for ‘taking our jobs’. It’s utter bullshit, they have every right to work and an even greater need for it than we do. They may make a quarter an hour, but at least with that quarter they can feed their children or get them even a small bit of education to better their lives. Us? We just blow it on pointless game consoles and big screen TVs. Our financial burdens are our own damn fault.

    Conditions there may be harsh, but the last thing we should do is to force these companies to bring those jobs back to the west. Any job is better than no job for these people, and over time they will use their collective power to demand better conditions day-by-day, much like the industrialization of America.

    • So you’re saying instead of improving things in America we should worry about improving things for other countries? So, by your logic, because places like Canada or the U.K. don’t outsource jobs as much as we do, they’re just cold hearted? America can’t play hero of the world. It’s killing us. The fact that unemployment here in America is sky-high means we should probably worry about ourselves before we worry about anyone else.

      • So true, since when did America feel that it had to be the hero. That was our downfall, helping out so many countries. Similar as to why America feels they can just walk in all over a country and liberate them and make them a better country, causing wars, causing countries to be mad at us.

        OT though I wouldn’t want to pay extra money for a console, if a PS4 came out I would probably wait for it to drop to $300 because I just got my PS3. Costs would go way up if production moved back to the states. It’s a bittersweet situation, but I’m not sure if enough people would be willing to pay the extra hefty load for an American made product when we’ve been so used to the cheap production outside of America, including myself.

        I’m glad this mass suicide warning has shed some light on the situation, and that a company is finally “trying to do something about it”. Though I like how Microsoft said they regularly check that vendors (like Foxconn) are compliant with Microsoft standards… yet they never found any issues, even though this has been a long-term issue, loooooooong.

      • I never got the whole patriotism bullshit. You shouldn’t get better rights or opportunities just because you’re born and raised in a certain country. In a modern interconnected world, countries can’t rely on themselves anymore. At least businesses see this and the benefit of working in other countries (although only because it fattens their wallet, but I’d actually say it’s better than being purely self-righteous and feeling entitled).

        People being unemployed and falling into debt is their own damn fault, because they buy everything they want, yet can’t afford, plus have these ‘standards’ that prevent them from taking up the thousands of jobs just sitting there waiting to be filled. Yet, in these developing countries where it’s ACTUALLY life and death to work (with no government to pamper them), they eat these job up. That alone speaks volumes of who deserves ‘opportunity': the spoiled or the desperate?

  8. I guess they’re not screwing around. Never hear anything like that happening with sony. (That’s why sony is better than microsoft) :)

    • Just so you know, Foxconn is a huge electronics manufacturer in China that makes products for Microsoft, Apple, Nintendo, and even Sony, among others. The incident described in this post just happened to take place in a plant working on Microsoft products.

    • Shut Up Bro. No Need to Be an arrogant fanboy in an article like this
      P.S I Have A PS3 as well im just not boasting the fact no matter how much i enjoy the games i get on it

  9. work hard.. just only for living.
    money is only ways in China

  10. It would suck if consoles started pricing at seven-nine hundred dollars, but it sucks even more for those who are struggling to make them. I’m sure the devs of LA Noire were being pushed to the limits like these workers. Better management is the solution, methink…

  11. Reading this, i am terrified at how these rich organisations can have rediculously terrible working conditions (but i guess thats how the get rich huh) and well, if the prices were to rise at this point in time i would think it could stop people (me) from buying these products but thats just me.

  12. This is why I dont buy xbox! X(

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