James was caught between two players and his head appeared to collide with the knee of Croatian defender Domagoj Vida before he hit the floor and remained motionless.
There was immediate concern on the Wales bench that James had been knocked out cold but he was not substituted and ended up playing the full 90 minutes.
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Giggs then suggested afterwards that the Manchester United winger, who lay still in a worrying pose that saw physios run off the bench and onto the pitch without waiting for the referee's invitation, was not as badly hurt as it seemed.
"Dan James went down and stayed down with a bit of acting really, but the medical staff went over and he was compos mentis," Giggs told Sky Sports.
"We did all the [concussion] tests at half-time and he was fine.
"He stayed down and was a bit streetwise.
"He told the doctors 'I'm not moving, I'm just sitting still'. Not to get anyone sent off, he was just using his nous."
Wales' Gareth Bale celebrates scoring their first goal
Image credit: Reuters
Mateo Kovacic, Luka Modric and Gareth Bale all appeared to pick up injuries during the hard-fought game in Cardiff.
James said: "There were a few tackles flying in but you always expect it in these games.
"I'm fine. I think he just caught me in the head.
"I didn't get knocked out, fortunately."
There was plenty of hefty tackling in the encounter
Image credit: Getty Images
The game saw referee Bjorn Kuipers show eight yellow cards and Giggs admitted he thought Croatia were cynical with some of their defending.
"There were a few fouls in the first half where they were maybe not yellow cards, but they were just stopping our flow," Giggs added.
"We would win the ball back looking to counter and they're smart. That's something we need to get better at.
"When you see their two centre-halves get booked early on you want to test them a little bit more."