Video game companies in Japan experienced a significant stock market decline, triggered by new tariffs announced by U.S. President Donald Trump.
White House officials have indicated targeted reciprocal tariffs on approximately 60 countries they identify as the "worst offenders," set to take effect on April 9. Japan faces a customized tariff rate of 24% under this plan.
According to Trump administration officials, these nations either impose higher tariffs on U.S. exports, employ non-tariff barriers that restrict American trade, or engage in practices considered detrimental to U.S. economic objectives.
Tariffs function as taxes on specific imported goods. While companies within the supply chain might occasionally absorb these costs, the added expenses are typically passed on to consumers. For the gaming community, this unfortunately means that tech and gaming products are likely to see price increases.
Japan's Nikkei 225 index fell 7.8% at closing, Australia's ASX 200 dropped 4.2%, and South Korea's Kospi finished 5.6% lower. The Shanghai Composite declined by 7.3%, and the Taiwan Weighted Index lost 9.7%. Meanwhile, the Hang Seng Index was down 12.5% during afternoon trading.
Dr. Serkan Toto, CEO of Kantan Games, summarized the drop in Japanese video game stocks as markets opened on the morning of April 7. Nintendo shares decreased by 7.35%, Sony fell 10.16%, Capcom dropped 7.13%, and Sega declined by 6.57%.
It's Monday 10am in Japan where Japanese game stocks currently react to these insultingly dumb tariffs like so:
— Dr. Serkan Toto (@serkantoto) April 7, 2025
Nintendo -7.35%
Sony -10.16%
Bandai Namco -7.03%
Konami -3.93%
Sega -6.57%
Koei Tecmo -5.83%
Capcom -7.13%
Square Enix -5.23%
The mobile game companies do even worse.
Nintendo surprised the gaming industry last week by delaying Nintendo Switch 2 pre-orders in the U.S., citing tariff-related uncertainties. Pre-orders were originally scheduled to begin on April 9 but have been postponed specifically in the U.S., though the June 5 release date remains unchanged. Pre-orders in other regions will start on April 9 as initially planned.
Nintendo set the Switch 2 price at $449.99, with a Mario Kart World bundle available for $499.99. Mario Kart World alone is priced at $79.99.
Nintendo Switch 2 comes with the following:
Nintendo Switch 2 consoleJoy-Con 2 controllers (L+R)Joy-Con 2 GripJoy-Con 2 StrapsNintendo Switch 2 DockUltra High-Speed HDMI CableNintendo Switch 2 AC AdapterUSB-C Charging Cable
Niko Partners analyst Daniel Ahmad had cautioned that Trump's unexpected tariffs on countries like Vietnam—where Nintendo relocated some Switch 2 production to avoid U.S. tariffs on China—could prompt a reassessment of the company's strategy.
"While the company has shifted some of its manufacturing to Vietnam to offset U.S. tariffs on China, the looming threat of reciprocal tariffs prior to the Switch 2 showcase will have also forced Nintendo to consider a higher price for the rest of the world," Ahmad said. "The reciprocal tariffs on Vietnam and Japan have come in higher than expected, and Nintendo will feel the impact of this if the tariffs go into full effect."
Nintendo fans and market analysts are growing concerned that the company may raise the price of the Switch 2 and its games even more, especially following the negative reaction to the initial pricing revealed at the console's launch.
Uncertainty also surrounds Sony, the manufacturer of PlayStation consoles, including the $700 PlayStation 5 Pro. IGN has reached out to Sony to inquire about potential price adjustments in the U.S. market.
Goldman Sachs has increased its forecast, now estimating a 45% probability of the U.S. entering a recession within the next year, up from a prior estimate of 35%. Similarly, JPMorgan now sees a 60% chance of an economic downturn affecting both the U.S. and global markets.
A BBC report states that Trump has justified the tariffs, commenting that "sometimes you have to take medicine to fix something."
For further information, see everything announced at the Switch 2 Nintendo Direct, and expert opinions on the Switch 2's pricing and the $80 cost of Mario Kart World.
