Key Takeaways
- Shares dropped 8.4% in Tokyo trading to 7,020 yen, marking the lowest close since August 2024
- Memory chip cost pressures forced Switch 2 prices up by 7-20% across major markets
- Company projects 16.5 million Switch 2 unit sales for current fiscal year versus 19.86 million since launch
- Operating profit guidance of 370 billion yen significantly trails analyst consensus of 480 billion yen
- Industry observers suggest Nintendo’s traditionally cautious forecasting approach may be at play, with independent estimates reaching 19 million units
Nintendo shares experienced a significant downturn Monday following the release of annual results and forward guidance that disappointed market participants.
Trading concluded with shares down 8.4% at 7,020 yen in Tokyo—the weakest closing price since August 2024. Year-to-date losses have reached 34% in 2026.
Operating profit climbed nearly 28% to 360 billion yen for the fiscal year concluding March 31, supported by net sales that roughly doubled. The figure remained below market projections.
The company’s fiscal 2027 outlook generated additional concern. Nintendo projected operating profit of 370 billion yen, considerably below the 480 billion yen analyst consensus. Management expects annual revenue to contract 11.4% to 2.05 trillion yen.
The Switch 2 console sits at the center of investor anxiety. Management anticipates 16.5 million unit sales during the current fiscal period—a reduction from the 19.86 million units moved since the June 2025 launch.
Elevated Switch 2 Pricing Shapes Sales Expectations
Last Friday, Nintendo revealed pricing adjustments for Switch 2 hardware across the United States, Japan, and European territories. American consumers face a $50 increase, while Japanese buyers see a 10,000 yen markup. The adjustments range from 7% to 20% depending on region.
The driver: escalating memory chip costs stemming from AI infrastructure buildout. Rising component expenses compress hardware margins while potentially cooling consumer appetite.
“The biggest factor is of course the price hike that Nintendo thinks will lead to softer demand,” said Serkan Toto, CEO of Kantan Games.
Software projections add another layer of concern. Nintendo estimates combined Switch and Switch 2 software sales of 165 million units in fiscal 2027—representing an approximate 11% year-over-year contraction. The guidance has prompted questions about management’s confidence in the development pipeline.
Market watchers await news of a “Nintendo Direct” presentation showcasing upcoming releases, especially titles featuring beloved franchises including Mario and Zelda.
Industry Experts Question Conservative Projections
Some analysts maintain optimistic positions. Nintendo’s track record includes historically conservative guidance, which several observers believe applies to current forecasts.
Kazunori Ito, director at Morningstar, characterized the guidance as “overly conservative.” His firm projects Switch 2 sales of 19 million units this fiscal year, exceeding Nintendo’s official forecast. Morningstar also anticipates software sales reaching 205 million units, surpassing the company’s 165 million estimate.
“We view Nintendo’s stock as undervalued,” Ito stated, noting the market is “underappreciating the long-term earnings growth from over 100 million Switch users migrating to the new platform.”
Toto shared similar sentiment: “I believe that Nintendo is, as usual, lowballing because users will get used to the new price of the console over time.”
Positive indicators exist within the landscape. Nintendo highlighted a robust third-party software catalog scheduled for coming months. Launch titles including “Mario Kart World” and “Pokémon Pokopia” have delivered strong results—the latter exceeded 4 million units sold within its first five weeks.
Toto suggested a Nintendo Direct event outlining the 2026 software roster could arrive as early as next month.
