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Recap: There was a time when the gaming industry was oblivious to the issue of using conflict minerals in video games. Awareness only began to emerge in 2010 with the Dodd-Frank Act, and in those early years, the industry struggled with compliance. Since then, conditions have improved, with some companies performing better than others.
Former GamesIndustry.biz writer Brendan Sinclair, now at Unlosing Writer, began writing about conflict minerals in video games almost a decade ago, after he saw that Activision Blizzard had disclosed in a SEC filing its concern about the danger of its breakout hit Skylanders helping to finance armed militias and "conflict characterized by extreme levels of violence."
Sinclair has been tracking the industry's record of ethical sourcing of conflict minerals over the years, with mixed results.
This year's disclosures illustrate the ongoing challenges.
Microsoft made significant improvements, increasing its conflict-free smelters and refiners from 65% to 87% and reintroducing language about not funding armed groups. GameStop reported all 205 smelters in its supply chain as conflict-free, up from just 19 the previous year, though concerns remain about supplier transparency. However, Sony's conformance rate dropped to 69%, its lowest since 2014, although the company provided additional information on cobalt sourcing and supply chain violations.
Nintendo rebounded to nearly 100% conformance, while Amazon continued its pattern of vague reporting.
Apple maintained its nine-year streak of 100% conflict-free audits, though it had to remove 14 non-compliant operations from its supply chain. Google nearly achieved its seventh consecutive year of full compliance, with only three smelters not meeting standards. Meta improved from 89% to 94% conformance, reversing a downward trend.
Turtle Beach showed modest improvements, reaching 84% compliance, while Logitech slightly increased its already high conformance rate to 98.3%.
Historically, the issue of conflict minerals gained prominence in the early 2000s when the United Nations established that mining certain materials was funding armed militias in the Democratic Republic of Congo (DRC). In response, the U.S. passed regulations as part of the Dodd-Frank Act in 2010, requiring publicly traded companies to audit their supply chains for tin, tantalum, tungsten, and gold (3TGs) sourced from the DRC and neighboring countries.
The European Union implemented similar regulations in 2021, expanding the scope to conflict-affected areas worldwide, though still focusing on 3TGs. These regulations have pushed companies to improve their supply chain visibility and ethical sourcing practices, although challenges remain.
Initially, according to Sinclair, many gaming companies struggled with compliance.
Sony's first disclosure in 2014 revealed that fewer than 14% of its smelters were certified conflict-free. Over time, most companies improved their practices, with some, like Apple, setting high standards for supply chain visibility.
However, progress hasn't been linear. The COVID-19 pandemic disrupted supply chain monitoring efforts, and some companies have regressed in recent years. Sinclair is the first to admit that disclosures and auditing processes are not perfect solutions but provide a starting point for companies to take responsibility for their supply chains.