In his 2024 annual report on the state of mineral sourcing in the games industry, Unlosing Writer Brendan Sinclair, a veteran reporter formerly associated with GamesIndustry.biz, gave the thumbs up to both Nintendos that achieved a 99% compliance rate with the conflict minerals law – and Microsoft for the progress they’ve made since last year’s report, noting that the latter, which jumped from a 65% compliance rate last year to 87% this year, still has a lot to do.
Conflict minerals (tin, tantalum, tungsten and gold, collectively known as 3TG) are minerals originating from the Democratic Republic of the Congo (DRC) and surrounding countries – all of which are sometimes referred to as “covered countries” in the context of conflict minerals law.
In the gaming industry, manufacturers use 3TG to make hardware, mostly consoles, and the “big three” of Nintendo, Microsoft, and Sony have had issues with ethical sourcing in the past.
The United States and the European Union require companies to disclose their sources of 3TG minerals from covered countries, whose regimes and armed militias are known for forced labor and human rights abuses, in addition to using 3TG sales to fund their agendas and fuel war.
In the US, Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, since it took effect in 2010, requires companies to have their mineral supply chains reviewed by independent auditors and companies to publish reports to the public ensuring that they have made progress in its pursuit of ethical sourcing.
And in the EU, the Conflict Minerals Regulation Act, passed in 2021, took the precedent set by Dodd-Frank further, targeting the DRC and its neighbors in any region designated by the United Nations as a conflict zone or high-risk area. risks. Significantly, however, it still only targets 3TG and not all the minerals that regimes in those areas may be selling to finance their rule.
As mentioned earlier, Nintendo has made progress in 2024, going from 95% compliance to nearly 100% over the past year. However, Sinclair also notes that prior to 2022, Nintendo shied away from partnering with companies and suppliers from the covered countries – which ran counter to international opinion as it prevented money (and therefore stability) from flowing outside of regions that desperately needed it. Having since corrected their mistake, Nintendo now has ethical sources in and around the DRC – which Sinclair hailed as a “good sign” of the company’s improvement – and may even be on track to achieve a perfect 100% compliance rate.
While 100% compliance on Nintendo’s part would not be completely “clean”, as the regulation does not cover all possible blind spots, it would still be a significant achievement.
In that same report, Sinclair also dived into how other gaming companies like Sony, GameStop, and Logitech were handling the problem.
Sony continued its downward trend from previous years, increasing its compliance rate to 69%, down from 73% last year and 75% the year before.
GameStop, previously slammed by Sinclair as “disgraceful,” chose ambiguity over transparency, saying all of its suppliers had been certified conflict-free, but added that “not all of our suppliers, however, have identified the sources for their raw materials.” Sinclair points out that not only did GameStop fail to disclose how many suppliers withheld information about their sources — information that the conflict minerals regulation was designed to put in the spotlight to begin with — but it also failed to clarify why this was not a serious ethical and administrative issue.
However, in better news, Logitech came in with a 98.3% compliance rate and even audited its sources of tin and cobalt, ensuring that the mineral is sourced responsibly and ethically beyond what is covered by regulation.
As he finished, Sinclair hoped the industry would continue to make improvements over the next year. While some companies have seen a decline in ethical sourcing in 2024, others have leaped ahead, and if the progress made by Nintendo, Microsoft and Logitech is any indication, many in the gaming industry are still willing to change their business practices in line with trade regulation and in response to ethical issues raised by the international community.
