Tariffs "crush" Japanese game stocks: Nintendo (NTDOY.US) in the Tokyo market once plummeted nearly 10%, Sony (SONY.US) and Bandai Namco (NCBDY.US) followed suit.

Due to investor concerns that Donald Trump's tariffs will push up the prices of American game consoles, Nintendo's stock (NTDOY.US) saw its biggest drop in seven months. Data shows that Nintendo fell as much as 9.8% on the Tokyo stock market on Friday, marking the largest intraday drop since the market crash on August 5. Last month, the stock traded at an all-time high, and before the sharp drop on Friday, it had already risen 23% this year. So far this year, gaming stocks have been one of the brightest spots in Japan's sluggish stock market. As of Thursday, the Solactive Japan Games and Animation Index, which includes Nintendo, Sony, and Bandai Namco (NCBDY.US), has risen 14%, while the Tokyo Stock Exchange index has fallen 1.2%. Even before Trump announced an increase in tariffs on China this week, software manufacturing companies like game developers were seen as relatively safe from tariffs in the tech industry, leading to stock price increases. Despite Bandai Namco being the best performing stock among Japan's top 100 stocks year-to-date in 2025, the company still fell 3.6% on the Tokyo market on Friday. Meanwhile, Capcom (CCOEY.US) and Konami Group Corp also saw their stock prices drop by over 4%. Bloomberg Intelligence analyst Nathan Naidu wrote in a report that under Trump's new tariffs, game consoles like the Switch 2 "may become more expensive in the U.S. (the world's largest market for game consoles) due to higher import costs. Most game consoles are either manufactured in China or rely on Chinese suppliers for components." However, Trump raised tariffs on Chinese imports from 10% to 20% on March 4. Naidu added that investors may sell stocks of Japanese game console manufacturers on Friday as gaming media reported on tariff risks yesterday, sparking concerns about the industry's prospects. Sony Group, the maker of PlayStation, saw its stock fall by 6% at one point, the largest drop since August. Furthermore, investors expressed that the withdrawal of global funds from Japanese stocks in turbulent market conditions could exacerbate the decline of gaming stocks. Nintendo reported that about half of its stocks are held by foreign buyers. Sanford C. Bernstein analyst Robin Zhu believes that tactical investors are unwinding positions because the market for the industry has become crowded and expensive compared to historical levels. It is worth mentioning that Ikuo Mitsui, a fund manager at Asaka Securities, stated, "Global investors are reducing their holdings of Japanese stocks, and now they can't resist even selling the most attractive stocks they have held so far." Yasuo Sakuma, President of Libra Investments, also stated, "Even gambling stocks, which have performed well so far this year, are now under pressure. I suspect some investors are forced to sell these stocks to offset losses in other areas."