Nintendo shares fall after Switch 2 price rise, weak sales forecast
TOPSHOT – A Super Mario character is pictured on a Nintendo screen ahead of the launch of the company’s Switch 2 console at an electronics store in Nagoya, Aichi prefecture, on June 2, 2025.
Richard A. Brooks | Afp | Getty Images
Nintendo’s Shares fell on Monday after the gaming giant warned sales of its flagship Switch 2 console would fall this financial year and raised the price of the device due to rising memory costs.
Nintendo shares fell 8.4% to 7,020 yen in Tokyo, Japan, hitting their lowest level since August 2024. The stock is down 34% this year.
Nintendo on Friday announced price increases for its Switch 2 console in markets around the world as an unprecedented increase in the price of memory chips due to the boom in artificial intelligence infrastructure increased the cost of manufacturing the device.
Nintendo said it estimates the Switch 2 will sell 16.5 million units in the current fiscal year ending March 2027, down from 19.86 million units since its launch in June last year. The expected decline in sales of the console, which was released less than a year ago, is raising concerns among investors.
“Nintendo projects Switch 2 hardware sales to decline this fiscal year rather than increase as they typically do with new consoles,” Kantan Games CEO Serkan Toto told CNBC on Monday.
“The biggest factor is of course the price increase, which Nintendo thinks will lead to reduced demand.”
Nintendo shares since August 2024.
‘Low ball’ guidance
Nintendo has a reputation for providing conservative guidance. Toto said the latest numbers are probably no different.
“I believe that Nintendo is as low-rated as ever because users will get used to the new price of the console over time,” Toto said.
Morningstar director Kazunori Ito said in a note Sunday that Nintendo’s guidance was “extremely conservative.”
“We believe the increase in console prices is inevitable given the prolonged inflation in storage costs. While the weak shipment guidance likely reflects extreme caution regarding demand, the increase itself has been kept moderate, and we expect shipments to hold up better than the company expects,” Ito said.
The price of the Switch 2 has been increased by $50 in the US and by 10,000 Japanese yen ($64) in Japan.
Ito said he expects Switch 2 sales to reach 19 million units in the current fiscal year, compared to Nintendo’s forecast of 16.5 million units.
“We think Nintendo’s shares are undervalued,” Ito said. “The market appears to be overly focused on short-term downsides and conservative guidance while underappreciating the long-term earnings growth from more than 100 million Switch users switching to the new platform and increased game purchases.”
Concerns about game sales
Another metric the market keeps a close eye on is Nintendo’s software or game sales, as blockbuster games can help boost hardware sales.
The Japanese gaming giant said it expects software sales on the original Switch and Switch 2 to total 165 million units in the fiscal year ending March 2027. This represents a year-on-year decline of approximately 11%.
“The annual decline in game shipping guidance risks signaling that Nintendo lacks confidence in its production pipeline,” Morningstar’s Ito said.
“However, since user engagement typically accelerates in the second year of a console cycle, we view this as very pessimistic,” he said, adding that Morningstar was forecasting software sales of 205 million units, above Nintendo’s own forecast.
Nintendo has had some early gaming successes with the Switch 2, including “Mario Kart World” and “Pokémon Pokopia.” It became a surprise viral hit, selling more than 4 million copies within five weeks of its release in March.
But investors are waiting to hear more about Nintendo’s gaming portfolio, especially upcoming games featuring some of its most iconic characters like Mario and Zelda. Investors are watching closely to see when the company announces a “Nintendo Direct” event; This event is often where major upcoming games take place.
“We should have a new Nintendo Direct presentation as soon as next month, revealing the 2026 software lineup,” Toto said.
