Nintendo shares plunge nearly 10% as Trump tariff fears rock Japan’s gaming stocks

Shares of Nintendo Co., the maker of Mario Kart, suffered their steepest drop in seven months as investors pulled back from Japan’s strong-performing video game stocks

This comes amid concerns that Donald Trump’s tariffs could push up console prices in the U.S.

The Japanese gaming company tumbled over 9% in Tokyo, its biggest drop since the stock market rout on Aug. 5. The shares had traded at an all-time high last month and jumped 23% this year before Friday’s plunge.

Tariff hike sparks sell-off in Japanese gaming stocks

With Trump’s newly imposed tariffs, gaming consoles, including the anticipated Switch 2, could see higher prices in the U.S., the world’s largest market for game consoles, due to increased import costs.

Bloomberg Intelligence analyst Nathan Naidu noted that most consoles are either manufactured in China or rely on Chinese suppliers for components. On March 4, Trump raised tariffs on Chinese imports from 10% to 20%.

Naidu added that investors are likely offloading shares of Japanese console makers on Friday after gaming-related media reports about tariff risks yesterday, which stoked concern about the sector’s outlook. PlayStation creator Sony Group Corp. lost 4.2%, which is also its biggest drop since August.

Shareholders say a broader pullback from Japanese stocks by global funds amid market volatility is likely exacerbating the decline in gaming shares. According to Nintendo, foreign buyers hold approximately half of its shares.

Ikuo Mitsui, fund manager at Aizawa Securities Co., says international investors are reducing their positions in Japanese stocks, and they now can’t even help selling the most attractive stocks they have so far held on to.

Gaming stocks lose momentum as investors unwind positions

Gaming stocks have been a rare bright spot in Japan’s otherwise sluggish equity market this year. The Solactive Japan Games & Animation Index—which tracks companies like Nintendo, Sony, and Bandai Namco Holdings Inc.—had climbed 14% through Thursday, in contrast to a 1.2% decline in the Topix index.

Robin Zhu, an analyst at Sanford C. Bernstein, noted that he believes tactical investors are unwinding positions as the sector has become crowded and expensive compared to historical levels.

Before Trump doubled tariffs on China this week, software companies, including game developers, were considered relative safe havens from trade risks within the tech sector, fueling stock gains. Bandai Namco, the top performer among Japan’s 100 largest stocks in 2025, slid 3.2% on Friday, while Capcom Co. and Konami Group Corp. each fell more than 4%.

According to Yasuo Sakuma, president of Libra Investments, even gaming stocks that have performed strongly this year are now facing pressure. He noted that some investors may be selling these stocks to offset losses in other areas.

China is retaliating with tariffs and non-tariff measures 

The sell-off in gaming stocks also comes amid general market jitters after China repealed its agreement with the U.S. At the beginning of the week, China imposed extra tariffs on specified American farm imports, effective March 10, 2025, in retaliation to Trump’s executive order increasing tariffs on all Chinese imports to 20% from 10%.

According to Notification No. 2/2025, dated March 4, 2025, of China’s State Council Tariff Commission (SCTC), China will impose tariffs on certain US imports effective March 10, 2025.

China took additional measures against U.S. companies, adding 10 U.S. entities to its Unreliable Entity List (UEL) and banning the import of gene sequencers from Illumina, Inc.

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