Nintendo’s Price Hike Gamble: Shares Bleed as Switch 2 Costs Climb

by

Nintendo’s stock price has dropped significantly after its president, Shuntaro Furukawa, told investors that increasing the price of their next console, the Switch 2, could make it unaffordable for many customers. Over the past five days, shares have fallen almost 9%, and over the last month and year-to-date, they’re down 14.7% and 34% respectively, with only a slight bounce back in trading.

In a recent statement to investors, as reported by IGN, Nintendo’s Furukawa explained the company is still assessing how the recent price increase will impact sales of the Switch 2. He acknowledged the higher price might discourage some buyers. However, he emphasized that compelling games that offer good value are key to success, and Nintendo plans to continue releasing unique and exciting titles for the Switch 2 to attract a wider audience.

Nintendo is increasing the price of the Switch 2 in Japan by 10,000 yen, bringing the new price to 59,980 yen (about $63.73 based on current exchange rates). Price hikes will also occur in the United States, Canada, and Europe starting September 1st, and the original Switch model will see a similar price increase. Nintendo announced these changes on May 8th through its official news channel.

Nintendo explained that recent price increases were due to issues in the market, specifically a shortage of memory chips and higher costs for those chips. Their financial results for the year ending March 2026 showed total revenue of 2.313 trillion yen and an operating profit of 360.1 billion yen. This represents a significant increase – 98.6% and 27.5% respectively – largely thanks to strong sales of the Switch 2 throughout the year.

Okay, so Nintendo just announced their projected profits for the year, and honestly, it wasn’t as high as investors were hoping. The stock actually dropped almost 9% when trading opened on Monday! One analyst, Kazunori Ito from Morningstar, pointed out that Nintendo is predicting fewer game shipments this year, which could mean they don’t have a ton of exciting new stuff coming up. But he also thinks that’s a bit of an overreaction, because usually consoles get more popular in their second year, so things could still pick up!

Jefferies analyst Atul Goyal believes Nintendo intentionally set a low target for its profits, noting they’ve exceeded their initial profit forecasts for the last four years. He also predicts Nintendo will release a major new Mario game this fiscal year, a view that differs from what most analysts expect.

Since the Switch 2 launched worldwide on June 5, 2025, experts have been worried about the number of new games available. They note a shortage of games exclusive to the Switch 2 that could really encourage people to buy it. While Pokémon Pokopia gave Switch 2 sales a boost after its release in March, and Tomodachi Life: Living the Dream, released recently, is popular on both Switch and Switch 2 (with about 40% of its players owning a Switch 2), more exclusive titles are needed.

Furukawa explained to investors that they’ve seen a big jump in hardware sales whenever popular new games are released, and they expect this pattern to continue. He also noted that Nintendo is currently experiencing strong sales overall.

Nintendo relies heavily on video game sales, unlike Sony, which has a wider range of businesses. Sony’s stock increased by 10% recently, even though they predict lower PlayStation 5 sales. They also expect higher gaming profits and are partnering with TSMC to produce image sensors in Japan. Analyst Amir Anvarzadeh notes that because the PlayStation 5 is more established, Sony can more easily raise prices to cover increasing costs. Nintendo faces more difficulty with this, as their customers are generally more sensitive to price changes.

Read More

2026-05-12 20:16