Nintendo's shares fell 8.4% to 7,020 yen on Monday, marking the lowest price since August 2024, following the company's announcement of a sales forecast reduction for its Switch 2 console and a price increase due to rising memory costs. The stock has now dropped 34% this year.
Nintendo expects to sell 16.5 million units of the Switch 2 in the current fiscal year ending March 2027, a decrease from the 19.86 million units sold since its launch in June 2025. This decline in sales projections has raised investor concerns, particularly as it contrasts with typical trends for new consoles, which usually see increasing sales in their early years.
Serkan Toto, CEO of Kantan Games, noted that the price hike is likely to dampen demand. The Switch 2's price was raised by $50 in the U.S. and 10,000 yen in Japan. Analysts like Kazunori Ito from Morningstar believe Nintendo's guidance is overly cautious and expect actual sales to reach around 19 million units.
Additionally, Nintendo anticipates software sales for both the original Switch and Switch 2 to total 165 million units, reflecting an 11% year-on-year decline, which could indicate a lack of confidence in its game pipeline. However, Ito argues that user engagement typically increases in the second year of a console's lifecycle, suggesting that the forecast may be too pessimistic.
Investors are particularly interested in upcoming game announcements, especially for popular franchises like Mario and Zelda, with expectations for a new "Nintendo Direct" presentation soon to outline future releases