Nintendo shares fell in Tokyo on Monday after investors reacted to the company’s cautious Switch 2 sales forecast, planned price increases, and concerns over its upcoming game lineup. The stock dropped about 7% to 8%, reaching its lowest level in nearly two years, as the market questioned whether the console could keep its early momentum.
The selloff came even after Nintendo reported strong hardware sales for the financial year ended March. The Switch 2 shipped nearly 20 million units in its first year, beating the company’s earlier forecast. However, Nintendo expects sales to slow to 16.5 million units in the next financial year.
Nintendo’s share price came under pressure after the company projected lower Switch 2 hardware sales for the next financial year. Console sales often grow in the second year as more games arrive and more users enter the platform.
However, Nintendo said the Switch 2 may slow after a strong launch year. The company also pointed to rising component costs and supply pressure. As a result, investors focused on the weaker outlook instead of the strong first-year sales.
Nintendo remains known for conservative guidance. Still, analysts said the forecast raised questions about demand and software support. Morningstar analyst Kazunori Ito wrote, “The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline.”
Nintendo also confirmed price increases for the Switch 2 in several major markets. In Japan, the Japanese-language Switch 2 model will rise by 10,000 yen to 59,980 yen from May 25. In the US, Canada, and Europe, price increases will begin on September 1.
The US price will rise by $50, while Europe will see a €30 increase. Canada will also see a $50 price hike. Besides hardware, Nintendo is raising the price of Nintendo Switch Online in Japan, with the one-month membership moving to ¥400 from ¥306.
The price changes come as electronics firms face higher memory chip costs. Nintendo’s audience includes many casual gamers, who may be more sensitive to higher prices. Hence, the market is watching whether the increase will slow demand during the console’s second year.
Nintendo has extended the life of the original Switch with major franchises such as The Legend of Zelda and Pokémon. The Switch 2 also had strong early software sales, including Mario Kart World at 14.7 million units and Pokémon Pokopia at about 4 million units.
However, some analysts questioned whether the current release schedule has enough major games to keep demand strong. Upcoming Switch 2 titles include Yoshi and the Mysterious Book, Starfox, Splatoon Raiders, and Fire Emblem: Fortune’s Weave.
Jefferies analyst Atul Goyal wrote that the second year ‘is crucial’ and added that his non-consensus view is that Nintendo may release a major Mario game this year. He also said the company’s guidance may be ‘low by design,’ noting that Nintendo has beaten its initial operating profit forecast in each of the past four financial years.
Nintendo’s decline contrasted with Sony’s stock 10% rise in Tokyo on Monday. Sony forecast lower sales but higher profit in its gaming business. Its stronger digital sales helped support the segment, even as hardware faced similar cost pressure.
Unlike Sony, Nintendo depends more heavily on its core gaming business. Its characters and intellectual property remain popular in films and theme parks, yet hardware and software sales still drive much of the company’s performance.
Analysts also noted that Sony may have more room to manage higher costs because the PlayStation 5 has been on the market longer. Meanwhile, Nintendo must balance price increases, console supply, and demand for Switch 2 during a key year for the platform.
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