Nintendo Shares Decline Amid Lower Switch 2 Sales Forecast and Rising Component Costs
Nintendo's stock fell sharply following a forecasted decline in Switch 2 hardware and software sales, coupled with rising memory chip costs impacting profit margins.
Nintendo Co. experienced a significant stock decline, dropping 10% in Tokyo to its lowest point since August 2024. This downturn follows the company's projection of selling 16.5 million Switch 2 consoles and 60 million software units in the current fiscal year, marking a decrease from previous expectations. The company also cited escalating memory chip costs as a factor affecting profit margins.
In the fiscal year ending March 31, 2026, Nintendo reported selling 19.86 million Switch 2 units, surpassing its initial forecast of 15 million units. However, the company anticipates a decline in hardware sales for the upcoming fiscal year, attributing this to strong initial sales and planned price adjustments.
To address rising production costs, Nintendo announced a $50 price increase for the Switch 2, effective September 1, 2026. In the U.S., the console's price will rise from $449 to $499. Similar increases are planned for other regions, including Europe and Japan.
Despite these challenges, Nintendo's software titles continue to perform well. 'Pokémon Pokopia,' released on March 5, 2026, has sold over 4 million units within its first five weeks, placing it among the top five best-selling Pokémon spin-off titles.
The company remains optimistic about the Switch 2's performance, viewing the projected sales figures as healthy for the console's second year and anticipating further growth in its installed base.