Nintendo shares slump as price hikes, games shortfall spook market

TOKYO – Nintendo’s shares fell 8% in Tokyo on Monday after the company raised prices for the Switch 2 and the market worried about a lack of high-profile games to build momentum.

Nintendo reported strong hardware sales for the fiscal year ending in March, but its outlook for this year has negatively impacted the market, even though the company is known for its cautious forecasts.

The Kyoto-based company has extended the life of the original Switch with games in series such as “The Legend of Zelda” and has produced recently popular games such as “Pokemon Pokopia”, but it seems to be lacking in potential blockbuster games.

“The annual decline in game shipping guidance risks signaling that Nintendo lacks confidence in its production pipeline,” Morningstar analyst Kazunori Ito wrote in a note.

“But we find this overly pessimistic, as user engagement generally accelerates in the second year of the console cycle,” he wrote.

Nintendo also said it would increase prices of the Switch 2, with the Switch 2 Japan model going up 10,000 yen to 59,980 yen starting May 25, and prices in markets like the US increasing starting September 1.

The company has an audience among casual gamers who are considered particularly sensitive to price increases at a time when electronics manufacturers are grappling with rising memory chip prices.

Second year’s “very significant and non-consensus view is that we will release a Mario AAA game this year,” Jefferies analyst Atul Goyal wrote in a note.

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