Nintendo Stock Plunges as Tariff Fears Grip Gaming Industry
Investors flee Japanese gaming stocks amid concerns Trump’s tariffs could hike console prices in the U.S.
Tokyo, March 7, 2025 — Shares of Nintendo Co., the maker of Mario Kart and the Nintendo Switch, plummeted 9.2% in Tokyo trading today, marking the steepest drop in seven months. The selloff occurred as investors grew wary of the potential impact of U.S. President Donald Trump’s newly imposed tariffs on Chinese imports, which could raise console prices in the United States, the world’s largest market for game consoles.
Key Details
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Stock Drop: Nintendo's shares fell to their lowest level since August 2024, despite having surged 23% this year prior to today's plunge.
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Tariff Impact: Trump's decision to raise tariffs on Chinese imports from 10% to 20% could increase import costs for gaming consoles, including the anticipated Switch 2. Most consoles are either manufactured in China or rely on Chinese suppliers for components.
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Market Reaction: The sell-off in Nintendo shares was exacerbated by broader market volatility and concerns about the potential impact of tariffs on the gaming sector. Sony Group Corp. and Bandai Namco Holdings Inc. also saw significant declines.
Analyst Perspectives
Nathan Naidu, an analyst at Bloomberg Intelligence, noted that investors are likely offloading shares of Japanese console makers after gaming-related media reports about tariff risks. "Tariffs on video game devices and related products would negatively impact hundreds of millions of Americans and would harm the industry’s significant contributions to the U.S. economy," Naidu said.
Robin Zhu, an analyst at Sanford C. Bernstein, believes tactical investors are unwinding positions as the sector has become crowded and expensive compared to historical levels.
Broader Market Context
The sell-off in gaming stocks comes amid general market jitters after China repealed its agreement with the U.S. and imposed extra tariffs on specified American farm imports, effective March 10, 2025.
Conclusion
Nintendo's stock plunge reflects investor concerns about the potential impact of trade tensions on the gaming industry. As the world's largest market for game consoles, the U.S. is a critical market for Nintendo, and any increase in console prices could impact sales and profitability.
