Mysten Labs

Customers who purchased Mysten Labs’ SuiPlay0X1 handheld gaming device are facing unexpected import duty charges upon delivery, with some bills reaching hundreds of dollars as new U.S. trade policies take effect. The company has temporarily halted its next production batch while it evaluates the scope of the problem and explores potential solutions for affected buyers.

What Is the SuiPlay0X1?

The SuiPlay0X1 is a portable gaming PC designed to compete with devices like Valve’s Steam Deck. It distinguishes itself by integrating a built-in cryptocurrency wallet specifically for games built on the Sui blockchain, while also supporting traditional gaming titles from platforms including Steam and Epic Games Store.

Mysten Labs, the developer behind the project, partnered with startup Playtron to build the hardware and runs the custom GameOS operating system. The device was positioned as an accessible entry point for gamers interested in blockchain-based gaming experiences.

Company Background and Market Position

Mysten Labs was founded in 2021 by former Meta employees including Evan Cheng and Sam Blackshear, with backing from prominent venture capital firms including a16z Crypto. The company raised over $300 million across multiple funding rounds to develop the Sui blockchain and its ecosystem of applications.

The SuiPlay0X1 represented Mysten’s strategic push into consumer hardware, recognizing that blockchain adoption requires accessible entry points beyond trading platforms and digital wallets. The handheld gaming device market has experienced significant growth, valued at approximately $8.5 billion globally in 2024, with projections to reach $15 billion by 2030 as demand for portable gaming continues to expand.

By integrating Sui blockchain functionality directly into gaming hardware, Mysten aimed to demonstrate practical applications for its blockchain infrastructure while capturing a portion of the growing play-to-earn and blockchain gaming market. This market segment, though volatile, has attracted billions in investment from both traditional gaming companies and crypto-native ventures.

The Tariff Problem

Mysten priced the SuiPlay0X1 at a flat $599 globally for its initial production run of 10,000 units. The company stated this figure reflected manufacturing costs with minimal profit margin, making it difficult to absorb unexpected costs.

However, customers receiving their devices discovered that U.S. import duties were being assessed at the border. The charges stem from recent changes to American tariff policy, particularly affecting goods sourced from Hong Kong, which currently face a 20% import tax.

At this small scale, it is not possible to absorb tariffs and duties which differ for every country.

— Mysten Labs, Company Statement

One Illinois customer was notified by DHL, the courier handling the shipment, that $138 in duties were owed before delivery. Other reports across social media and the official Sui Discord community indicated significantly higher charges, with some buyers citing bills approaching $348 for a single unit.

Industry Context and Trade Policy Impact

The SuiPlay0X1 tariff situation represents a critical inflection point for the emerging crypto hardware sector. Unlike established consumer electronics manufacturers with decades of supply chain expertise and economies of scale, crypto hardware startups typically lack the infrastructure to navigate complex tariff structures or the financial capacity to absorb duties on small production runs.

Traditional handheld gaming device manufacturers like Nintendo and Valve have established distribution networks and relationships with customs brokers that allow them to manage tariff costs more effectively. These companies can spread tariff expenses across millions of units globally, reducing per-unit impact. Mysten’s 10,000-unit initial run provides no such economy of scale.

The elimination of de minimis exemptions particularly impacts emerging technology sectors where products are often manufactured overseas and shipped directly to consumers. Bitcoin mining equipment manufacturers, cryptocurrency hardware wallet producers, and other blockchain-related hardware companies face similar exposure. Industry analysts estimate that tariff changes could increase average consumer costs for crypto hardware by 15-35% depending on product category and source country.

Mysten’s Response and Challenges

On Thursday, Mysten Labs notified customers that it cannot absorb the import charges across its customer base due to the thin margins on which the device was sold. The company emphasized that tariffs and duties are set by governments, not by the hardware manufacturer, and that it receives no portion of these fees.

When asked how it would assist customers facing larger charges, Mysten did not provide specific commitments. A company representative acknowledged that federal duties are standardized across the U.S., but noted that additional state taxes and courier administrative fees can vary by region, creating unpredictable total costs.

The company indicated it is actively investigating the differences in duties and shipping fees across various U.S. regions but stated it remains uncertain about the full scope of variation. This lack of clarity has left both the company and customers without concrete solutions.

No customer should be charged duties equal to half their purchase price.

— Mysten Labs, Customer Communication

Mysten instructed customers who believe they are facing “excessive” charges to contact support via email, acknowledging that some regions appear to be experiencing significantly higher assessments than others. The company suggested that certain U.S. states are seeing greater duty amounts than their counterparts.

Market Implications and Competitive Landscape

The tariff crisis threatens to undermine Mysten’s competitive positioning against established gaming device manufacturers. Valve’s Steam Deck, priced similarly at launch, benefits from established distribution channels and established relationships with customs authorities that spread tariff costs efficiently.

For Mysten, the situation creates several strategic dilemmas. Absorbing tariff costs could deplete remaining venture capital reserves dedicated to product development and blockchain infrastructure. Passing costs to customers contradicts the company’s initial market positioning as an accessible entry point for blockchain gaming. A middle path—subsidizing tariffs for some customers while leaving others responsible—risks brand damage and social media backlash.

The incident also impacts investor confidence in crypto hardware as a viable business segment. Venture capital firms evaluating other blockchain hardware startups will likely factor tariff exposure into risk assessments, potentially reducing funding availability for the sector.

Broader Implications

The situation underscores a fundamental challenge for hardware manufacturers operating in the crypto space: the intersection of emerging technology business models with evolving trade policy. When a company operates on razor-thin margins and prices products uniformly across countries, sudden tariff changes can create untenable situations.

For consumers, the episode highlights the hidden costs that can accompany cross-border technology purchases. A $599 device can become significantly more expensive once import duties are applied, potentially exceeding the price of competing non-blockchain alternatives.

The broader crypto hardware market, including Bitcoin mining equipment and cryptocurrency wallets, may face similar pressures if tariff policies remain unpredictable. Companies will likely need to account for duty costs in their pricing models going forward, potentially raising consumer prices or limiting international distribution.

Mysten Labs’ challenge reflects a larger tension in the industry between expanding global reach and managing the regulatory and logistical complexities of international commerce. As crypto-related products move increasingly toward mainstream consumer hardware, these supply chain and tariff issues will likely become more common and more scrutinized.

Strategic Options and Future Direction

Mysten faces several potential pathways forward. The company could relocate manufacturing to jurisdictions with more favorable tariff relationships to the United States, though this would require significant capital investment and timeline delays. Alternatively, establishing regional distribution centers within the U.S. could allow for domestic sales without import duties, though this creates different logistical challenges.

Some industry observers suggest that crypto hardware manufacturers should collectively engage with policymakers to advocate for category-specific tariff treatment, similar to how other technology sectors have successfully negotiated trade arrangements. However, the fragmented nature of the crypto hardware industry makes coordinated advocacy difficult.

The company stated that additional production units remain on hold until it determines how to handle the duty situation for both current and future customers. How Mysten ultimately resolves this issue—whether through price adjustments, subsidy programs, or alternative distribution strategies—could set a precedent for other crypto hardware manufacturers facing similar tariff headwinds.

The outcome will likely influence whether blockchain hardware remains primarily a venture-backed specialty market or evolves into mainstream consumer electronics. For consumers and investors alike, the resolution of this tariff crisis will reveal whether crypto hardware companies can successfully navigate the complexities of modern international commerce while maintaining their original value propositions.