Nintendo shares plunge nearly 10% on U.S. tariff fears
Nintendo shares nosedive, hit by fears of higher console prices in the U.S.
Shares of Nintendo Co., the maker of the Mario Kart franchise, fell nearly 9.8% in Tokyo on Friday, marking their steepest intraday drop since August 2024.
The sell-off comes after the company had reached an all-time high just last month and gained 23% earlier this year. Other Japanese gaming companies also suffered, with Sony Group Corp. dropping 6% and Bandai Namco Holdings Inc. falling 3.6%, reports Bloomberg.
The sharp decline is driven by growing investor fears over increased U.S. tariffs on Chinese imports. Under new measures announced by former President Donald Trump, duties on Chinese goods — including gaming consoles — doubled from 10% to 20% on March 4.
As most gaming hardware is either manufactured in China or relies on Chinese-made components, analysts predict higher costs will drive up console prices in the U.S., the world’s largest gaming market.
Market Jitters and Global Fund Sell-Off
The broader sell-off in Japanese gaming stocks is also linked to global investor behavior. Roughly half of Nintendo’s shares are held by foreign investors, and the recent market volatility has prompted many to offload even high-performing assets.
"Global 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," said Ikuo Mitsui, fund manager at Aizawa Securities Co.
Japan’s gaming sector has been a rare bright spot in the country’s stock market, with the Solactive Japan Games & Animation Index rising 14% this year compared to a 1.2% drop in the broader Topix index. However, Friday’s losses show that even these high-flying stocks are not immune to growing market pressures.
The increased tariffs are reshaping perceptions of the gaming sector’s resilience. “Software-making firms like games developers had been seen as relative tariff safe havens within the tech sector,” noted analyst Robin Zhu from Sanford C. Bernstein. But with hardware costs rising, the outlook for console makers like Nintendo and Sony has become more uncertain.
Earlier, Dell Technologies Inc. saw its stock drop 7% to $100.54, following a mixed earnings report that left investors uneasy.
