The manufacturer might be affected directly in three ways.

(1) If it has borrowed money at a variable rate of interest, for example a medium-term bank loan, its borrowing costs (interest charges) will rise and its profits will be affected.

(2) If the company has been planning new investments, it might re-consider the decision to invest if it is intended to finance the investments by borrowing.

(3) The increase in interest rates might result in a stronger currency, with the country’s currency rising in value against other currencies. This would make any exports more expensive to foreign buyers. The manufacturer might therefore suffer a fall in export orders. The manufacturer might also be affected eventually by the effect of a higher interest rate on the economy generally, through the transmission mechanism. Higher interest rates might eventually result in a fall in consumer spending. If this happens, demand in the domestic market for computer games is likely to fall.