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The stock market plunge affecting video game companies across Japan was triggered by U.S. President Donald Trump's announcement of tariffs. These tariffs, set to impact roughly 60 countries deemed the "worst offenders," are scheduled to take effect on April 9. Japan, facing a 24% tariff, is among the targeted nations. The White House claims these countries impose higher tariffs on U.S. goods, set up non-tariff barriers, or engage in actions detrimental to American economic interests.
Tariffs essentially act as taxes on imported goods, often passed onto consumers rather than absorbed by the companies. This increase in costs is likely to affect the pricing of tech and gaming products, causing concern among gamers worldwide.
The ripple effect of these tariffs was immediately felt in the stock markets across Asia. Japan's Nikkei 225 benchmark index plummeted by 7.8%, while Australia's ASX 200 and South Korea's Kospi saw declines of 4.2% and 5.6%, respectively. The Shanghai Composite in China dropped by 7.3%, and Taiwan's Weighted Index fell by 9.7%. Hong Kong's Hang Seng Index was down 12.5% in afternoon trading.
Dr. Serkan Toto, CEO of Kantan Games, provided insights into the specific impacts on Japanese video game stocks at the market's opening on April 7. Notable declines included Nintendo at 7.35%, Sony at 10.16%, Capcom at 7.13%, and Sega at 6.57%. Other companies like Bandai Namco, Konami, Koei Tecmo, and Square Enix also saw significant drops in their stock values, with mobile game companies experiencing even steeper declines.
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.
In a surprising move last week, Nintendo announced a delay in U.S. pre-orders for the Nintendo Switch 2 due to these tariffs and the global uncertainty they have caused. While pre-orders in other regions will proceed as planned on April 9, U.S. pre-orders have been postponed, though the console's June 5 release date remains unchanged.
The Nintendo Switch 2 is set to launch at $449.99, with a Mario Kart World bundle priced at $499.99. Mario Kart World itself will cost $79.99. The console package includes the Nintendo Switch 2 console, Joy-Con 2 controllers (L+R), Joy-Con 2 Grip, Joy-Con 2 Straps, Nintendo Switch 2 Dock, Ultra High-Speed HDMI Cable, Nintendo Switch 2 AC Adapter, and a USB-C Charging Cable.
Niko Partners analyst Daniel Ahmad highlighted the potential impact of these tariffs on Nintendo's pricing strategy. He noted that Nintendo had shifted some of its Switch 2 manufacturing to Vietnam to mitigate U.S. tariffs on China. However, the unexpected high tariffs on Vietnam and Japan could force Nintendo to reconsider its global pricing, potentially leading to higher prices worldwide.
Concerns are mounting among Nintendo fans and analysts that the company may increase the price of the Switch 2 and its games further, especially following the backlash to the console's initial pricing announcement.
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Sony, another major player in the gaming industry with its PlayStation consoles, including the $700 PlayStation 5 Pro, is also under scrutiny. IGN has reached out to Sony for comments on potential price increases in the U.S. due to these tariffs.
Economic forecasts are also being revised in light of these developments. Goldman Sachs now estimates a 45% chance of a U.S. recession within the next 12 months, up from 35%, while JPMorgan sees a 60% chance of a global economic downturn.
In defense of the tariffs, President Trump stated, "sometimes you have to take medicine to fix something," according to a BBC report.
For more information, you can explore everything announced at the Switch 2 Nintendo Direct, and what the experts have to say about the Switch 2 price and Mario Kart World’s $80 price tag.
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