Nintendo shares fell 7 per cent in Tokyo on Monday, rattled by the company's decision to raise Switch 2 prices alongside mounting concerns that the gaming giant lacks a strong enough software pipeline to sustain the console's momentum through 2026 and into 2027.
The sell-off caps a bruising stretch for the Kyoto-based firm, whose stock has shed almost 50 per cent since hitting a record high above 14,000 yen in August 2025. Despite posting stable hardware sales for the financial year ended March, including a record-breaking 19.86 million Switch 2 units shipped, the company's outlook for the coming year fell well short of analyst expectations.
Nintendo Price Hikes Across the Board
Nintendo confirmed it will raise the Switch 2's recommended retail price in the United States from $449.99 to $499.99, effective 1 September 2026. In Japan, prices were raised 20 per cent to ¥59,980 with effect from 25 May. European consumers will see a 6 per cent increase to €499.99 on the same September date.
In a statement released on the company website, Nintendo president Shuntaro Furukawa cited higher component costs, exchange rate pressures, and broader shifts in global market conditions as driving the decision. Nintendo added:
We sincerely apologise for the impact these price revisions may have on our customers and other stakeholders, and we deeply appreciate your understanding.
Markets Unimpressed by Conservative Outlook
While Nintendo is well known for issuing conservative guidance, even by its own standards, the fiscal year 2027 forecast underwhelmed. The company projected net sales of 2.05 trillion yen, an 11.4 per cent year-on-year decline, against LSEG analyst consensus of 2.46 trillion yen. Net profit is forecast to fall 27 per cent to 310 billion yen, short of the 418.5 billion yen analysts had pencilled in. Nintendo also guided for Switch 2 unit sales of just 16.5 million in the coming fiscal year, down from 19.86 million, citing memory chip price pressures and the knock-on effects of U.S. tariff measures.
Nintendo Software Pipeline Under the Microscope
Beyond hardware economics, investors are closely scrutinising Nintendo's game slate. The Kyoto firm extended the life of the original Switch through beloved franchises such as The Legend of Zelda, and has scored hits in the Switch 2 era, notably Mario Kart World (14.7 million units) and the recently launched Tomodachi Life: Living the Dream, which sold over 3.8 million units within two weeks. While Pokémon Pokopia has also performed well, the market remains uneasy that no breakout blockbuster appears imminent on the horizon. On the broader brand front, Nintendo's film The Super Mario Galaxy Movie has grossed more than $800 million since its release last month providing some narrative cushion even as the software pipeline draws scrutiny.
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Memory Crunch and Macro Headwinds
Nintendo and Sony are both grappling with the impact of surging memory chip prices, Reuters reports, as the artificial intelligence boom constrains chip supply and deepens disruptions across the tech sector. Memory chip prices doubled in the first quarter alone compared to the previous quarter, and are forecast to climb a further 63 per cent in the current quarter, driven by AI data centre demand that has squeezed supply for smartphones, laptops, and automobiles alike.
All major Japanese exporters are navigating U.S. President Donald Trump's tariff measures alongside broader cost inflation pressures compounded by disruptions related to the war in Iran. Nintendo's financial forecast explicitly accounts for these "tariff measures" within its approximately 100 billion yen headwind estimate.
Sony, by contrast, had a stronger session as its shares rose 10 per cent in Tokyo on Monday after the company forecast lower PS5 sales but higher overall group profit, and announced a new joint venture with TSMC to develop and manufacture image sensors in Japan. "These results were at least validating of the thesis that Sony can protect group profits by scaling back PS5 shipments," wrote Bernstein analyst David Dai.
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What's Next for Nintendo?
The coming months will test if Nintendo's brand loyalty and its expanding 2026 software slate can offset the combined pressures of higher hardware prices, a global memory chip squeeze, and increasingly cost-conscious consumers. With the September price revision date on the horizon in Western markets, the company's ability to announce marquee titles before that deadline may prove decisive for both consumer confidence and investor sentiment. Nintendo has not ruled out further regional pricing adjustments, citing that additional details for other markets will be provided by overseas subsidiaries in due course.
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