Before Trump doubled levies on China this week, software-making firms like games developers had been seen as relative tariff safe havens within the tech sector, driving stock gains.

Shares of Mario Kart maker Nintendo plunged the most in seven months, as investors abandoned Japan’s outperforming video game stocks on worries that Donald Trump’s tariffs will drive up console prices in the US. 

Nintendo sank as much as 9.8% in Tokyo, its biggest intraday drop since the stock market rout on Aug 5. The shares had traded at an all-time high last month and jumped 23% this year before Friday’s plunge. 

Under Trump’s new levies, games consoles, including the Switch 2, “could have higher selling prices in the US — the world’s biggest market for game consoles — due to heftier import costs, as most are either manufactured in China or rely on suppliers in the country for parts”, wrote Nathan Naidu, an analyst at Bloomberg Intelligence, in a note.

Trump raised duties on Chinese imports to 20% from 10% on March 4.  

Investors are likely selling off shares of Japanese console makers Friday after reports about tariff risks by gaming-related media yesterday stoked concern about the sector’s outlook, Naidu added.

PlayStation creator Sony Group lost as much as 6%, also its biggest drop since August 2024.

A retreat from Japanese shares by global funds amid jittery markets is also likely fueling gaming stocks’ decline, investors say.

About half of Nintendo shares are held by foreign buyers, according to the company.

“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.

Gaming stocks have been among the brightest spots in Japan’s otherwise moribund equity market so far this year. The Solactive Japan Games & Animation Index, which includes companies including Nintendo, Sony and Bandai Namco Holdings, had risen 14% this year through Thursday, compared with a 1.2% fall in the Topix index.

“We think tactical investors are unwinding positions as the sector had become crowded and expensive versus historical levels,” said Robin Zhu, an analyst at Sanford C. Bernstein.

Before Trump doubled levies on China this week, software-making firms like games developers had been seen as relative tariff safe havens within the tech sector, driving stock gains.

Bandai Namco has been the best performer among Japan’s biggest 100 stocks so far in 2025, but fell as much as 3.6% Friday. Capcom and Konami Group also dropped over 4%.

“Even gaming stocks that have performed well so far this year are now coming under pressure,” said Yasuo Sakuma, president at Libra Investments. “I suspect some investors are being forced to sell those stocks to make up for losses elsewhere.”