Nintendo shares sink 10% as gaming giant faces memory shortage concerns
Nintendo Co. Switch 2 game consoles will be available Thursday, June 5, 2025, at a Bic Camera Inc. in Tokyo, Japan. in the electronics store. Nintendo Co. from Tokyo to Manhattan fans queued for hours to be among the first to get their hands on the Switch 2, sparking one of the biggest global gadget launches since the iPhone launched yesterday.
Kiyoshi Ota | Bloomberg | Getty Images
Nintendo shares tumbled more than 10% on Wednesday, a day after the gaming giant missed market estimates for quarterly revenue and faced headwinds due to an unprecedented memory shortage.
But the company beat profit forecasts with a 24% year-on-year increase, boosted by sales of the Nintendo Switch, which has been the company’s best-selling console so far since its launch in 2017. Revenues increased 86%.
Nintendo is facing pressure this year as shortages of memory chips, a key component in gaming consoles, have caused prices to rise.
Investors remain concerned about the impact of memory costs on the company’s margins, according to Andrew Jackson, head of Japanese Equity Strategy at Ortus Advisors.
While Nintendo President Shuntaro Furukawa said Tuesday that increases in memory prices have not significantly affected fiscal year results, he said it could impact profitability if component costs remain high in the long term.
While the company maintained its full-year Switch 2 sales forecast on Tuesday, one question facing Nintendo this year is whether the upcoming Switch 2 game lineup will be enough to convince consumers to switch to the latest gaming console, which launched in June last year.
It plans to release “Mario Tennis Fever” for Switch 2 in February and “Pokémon Pokopia,” two games from its most popular series, in March.
The company also has “Super Mario Galaxy Movie” set to be released in April. The first Super Mario movie, released in 2023, provided a significant boost to Nintendo’s console sales, and the company was likely hoping to have a similar impact on Switch 2.
On Tuesday, Omdia senior analyst James McWhirter told CNBC that 2026 will be a “make or break” year for the Switch 2’s future as Nintendo looks to gain more mass-market appeal.
Nintendo’s shares are down more than 15% so far this year.
— CNBC’s Arjun Kharpal contributed to this report.
