The announcement of U.S. President Donald Trump's tariffs has sent shockwaves through the Japanese video game industry, causing a significant plunge in stock prices across the board. These tariffs, set to be implemented on April 9, target 60 countries deemed "worst offenders" by the White House, with Japan facing a 24% tariff rate. The rationale behind these measures is that these countries impose higher tariffs on U.S. goods, erect non-tariff trade barriers, or engage in actions that undermine U.S. economic objectives.
Tariffs are essentially taxes levied on imported goods, and while businesses might absorb these costs, they are more commonly passed on to consumers. This development is particularly concerning for gamers, as it could lead to increased prices for tech and gaming products.
The impact on the stock market was immediate and severe. Japan's Nikkei 225 benchmark index fell by 7.8%, while the ASX 200 in Australia dropped 4.2%, and the Kospi in South Korea declined by 5.6%. The Shanghai Composite and Taiwan Weighted Index saw decreases of 7.3% and 9.7% respectively, and the Hang Seng in Hong Kong was down by 12.5% in afternoon trading.
Dr. Serkan Toto, CEO of Kantan Games, provided a detailed account of the plummeting stock values among major Japanese video game companies on the morning of April 7. The figures were as follows: Nintendo -7.35%, Sony -10.16%, Bandai Namco -7.03%, Konami -3.93%, Sega -6.57%, Koei Tecmo -5.83%, Capcom -7.13%, and Square Enix -5.23%. Mobile game companies experienced 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 delayed pre-orders for the Nintendo Switch 2 in the U.S. due to these tariffs and the uncertainty they've caused globally. Originally slated for April 9, U.S. pre-orders have been postponed, though the console's June 5 release date remains unchanged. Pre-orders in other regions will proceed as planned on April 9.
The Nintendo Switch 2 is priced at $449.99, with a Mario Kart World bundle available for $499.99. The standalone Mario Kart World game is priced at $79.99.
Nintendo Switch 2 comes with the following:
- 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 highlighted the potential impact of these tariffs, noting that Nintendo had moved some of its Switch 2 manufacturing to Vietnam to mitigate U.S. tariffs on China. However, the unexpected tariffs on Vietnam and Japan could force Nintendo to reconsider its pricing strategy globally.
"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 explained. "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."
Concerns are mounting among Nintendo fans and analysts that the company may increase the price of the Switch 2 and its games, potentially facing backlash over its pricing strategy post-reveal.
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 a previous estimate of 35%. JPMorgan sees a 60% chance of a U.S. and global economic downturn.
In defense of the tariffs, President Trump told the BBC, "sometimes you have to take medicine to fix something."
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.
