Video game companies in Japan have experienced a significant stock market drop following the announcement of new tariffs by the U.S. government.
White House officials have indicated targeted reciprocal tariffs on approximately 60 countries, set to take effect on April 9. Japan is among those facing a specific tariff rate of 24%.
The administration states these nations either impose higher duties on American goods, create non-tariff trade barriers, or engage in practices perceived to undermine U.S. economic interests.
Tariffs function as taxes on imported goods. While companies in the supply chain can absorb these costs, they are frequently passed on to consumers. This is likely to affect the prices of technology and gaming products.
Japan's Nikkei 225 index fell 7.8% at the close, Australia's ASX 200 dropped 4.2%, and South Korea's Kospi finished 5.6% lower. The Shanghai Composite declined 7.3%, and the Taiwan Weighted Index lost 9.7%. The Hang Seng was down 12.5% in afternoon trading.
Dr. Serkan Toto, CEO of Kantan Games, summarized the drop in Japanese video game stocks at the market open on April 7: Nintendo was down 7.35%, Sony 10.16%, Capcom 7.13%, and Sega 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.
Last week, Nintendo surprised the industry by delaying U.S. pre-orders for the Nintendo Switch 2, citing tariff-related uncertainty. Pre-orders were scheduled for April 9 but were postponed in the U.S., though the June 5 release date remains confirmed. Pre-orders in other regions will begin on April 9 as originally planned.
Nintendo announced the Switch 2 at $449.99, with a Mario Kart World bundle priced at $499.99. Mario Kart World itself is priced at $79.99.
Nintendo Switch 2 Package Includes:
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
USB-C Charging Cable
Niko Partners analyst Daniel Ahmad had cautioned that unexpected U.S. tariffs on countries like Vietnam—where Nintendo moved some Switch 2 production to avoid tariffs on China—could force a strategic reassessment.
"While the company has shifted some manufacturing to Vietnam to offset U.S. tariffs on China, the threat of reciprocal tariffs before the Switch 2 reveal likely pressured Nintendo to consider a higher global price," Ahmad said. "The reciprocal tariffs on Vietnam and Japan are higher than anticipated, and Nintendo will feel the impact if they are fully implemented."
Fans and analysts now worry Nintendo may further increase the price of the Switch 2 and its games, amplifying the existing backlash to the console's announced pricing.
Sony, which manufactures PlayStation consoles including the $700 PlayStation 5 Pro, also faces uncertainty. IGN has reached out to the company for comment on potential U.S. price increases.
Goldman Sachs has raised its forecast for a U.S. recession within the next year to 45%, up from a previous 35%. JPMorgan now sees a 60% chance of a U.S. and global economic downturn.
A BBC report notes that President Trump has defended the tariffs, stating, "sometimes you have to take medicine to fix something."
For more information, read our coverage of everything announced at the Switch 2 Nintendo Direct and expert analysis of the Switch 2 price and Mario Kart World's $80 cost.
