President Donald Trump’s tariff rollout has finally wobbled Wall Street confidence in the video game industry, which entered this year with sky-high expectations because of imminent product releases.
Nintendo’s Friday announcement that U.S. preorders on its much-anticipated Switch 2 console will be delayed because of tariff uncertainty sent the sector’s top stocks tumbling. But for the year, video game stocks have been much more resilient than the broader market.
Many prominent companies in the sector, including Nintendo, Take-Two Entertainment and Sony, continue to best major indexes. Despite this week’s tariff-instigated bloodbath, Japan’s Nintendo and Sony, and China’s Tencent and NetEase, remain up more than 2% year-to-date compared to a 19.28% fall from the Nasdaq. U.S.-based NBA 2K publisher Take-Two has risen 5.7%, while Madden publisher Electronic Arts and Roblox creator Roblox Corporation are down single digits.
Steadfast belief in consumer habits might be the cause for the market resilience. Consumers who cut back on entertainment spending in a dreary economic environment may view video game outlays as too essential to sacrifice, instead trimming elsewhere. That idea will continue to be tested in the coming weeks as Nintendo determines its action plan for the Switch 2 rollout and rivals consider their own tariff responses.
“Broader industry strength is probably helped by a little market rotation away from stocks that had been most favored prior to this year and the video game industry having several quality growth companies,” wrote Morningstar analyst Matthew Dolgin in an email. “We also think an argument can be made that video game companies are slightly more recession resistant than in the past, as they have become centerpieces of media spending for younger generations.”
That said, market movement varies depending on the company—French publisher Ubisoft, for example, is down double-digit percentage points this year, while Roblox was hit especially hard Friday, falling 9%.
The hardiness of some corporations has surprised experts. EA, for example, sunk in January on subpar EA Sports FC sales news before Trump rolled out his tariff plan only to make forward gains since then.
“I have a tougher time with the exact reason why EA has reversed after its bearish pre-announcement of fiscal Q3 earnings a couple months ago,” Dolgin said. “Seems to just be a relief in maybe getting past a nadir and not seeing subsequent commentary be worse.”
Before 2025, video game companies—and publishers in particular—were roiled by post-pandemic consumer pullback, cutting costs and laying off workers. The expected hardware release of the Nintendo Switch 2 and software launch of titles such as Take-Two Interactive Software’s Grand Theft Auto VI inspired Wall Street optimism for a resurgence.
As investors cling to that pre-tariff sentiment, they await sales indicators that will either vindicate or undercut their bets. Most top-selling sports titles come out in the summer and fall, and it is too early to tell whether recently released MLB: The Show 25 or Assassin’s Creed Shadows will hit targets. Grand Theft Auto VI will be the most consequential game when it comes out this fall; analysts think it could be the best-selling title of all-time.
The Switch 2, another product with record-breaking sales potential, is scheduled for a June 5 launch, with Nintendo saying it will stick to that date despite its newly announced U.S. presale delay.
The stock of Nintendo and fellow international console maker Sony are still in the green in 2025 even as tariffs threaten profit margins for the PlayStation 5 and Switch 2.
Microsoft, the Xbox seller that closed its purchase of gaming software giant Activision Blizzard in 2023, is in the red this year but still about five percentage points better than the Nasdaq.
Sony and Microsoft are complex cases, because they do extensive business beyond the scope of video games and offer a mix of hardware and software products. Sony gets 38% of its total revenue from its game and network services division, while Microsoft claims about 9% from gaming.
Nintendo’s fate is more closely tied to its next console. The Switch 2’s announced price point of $450 was already a point of contention—and that amount was set before higher-than-expected tariffs on Japan were known.
Wedbush analyst Michael Pachter said in an email that a further price increase on the Switch 2 “clearly will impact demand.” Pachter, however, speculated that the 24% tariff announced this week for U.S. imports from Japan could eventually be restructured.
Investors will keep a close eye on tariff ramifications for consoles as they determine whether to ride out the storm or bail before the product releases.
“It helps that games are ‘recession proof,’ but tariffs on hardware can disrupt that,” Pachter said.
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