Nintendo Shares Fall 7% Following Switch 2 Price Hike and Reduced Sales Forecast
May 11, 2026 - 7:39 am
Nintendo shares dropped roughly 7% in Tokyo trading on Monday after the company released its full-year results for FY26 and issued a cautious outlook for FY27. The stock has declined by approximately 30% since the start of 2026.
FY26 was Nintendo's most successful year, with revenue nearly doubling to ¥2.31 trillion and net profit increasing by 52.1% to ¥424 billion. The Switch 2, launched in June 2025, achieved the highest number of console launches in the company's history.
However, Nintendo's guidance for FY27 indicates a revenue decline of 11.4% to ¥2.05 trillion, with net profit expected to drop by 26.9% to ¥310 billion. The projected sales of Switch 2 hardware units stand at 16.5 million, a significant decrease from FY26's figure.
The company attributed this more conservative view to several factors, including:
- A combined impact of ¥100 billion in higher memory and material costs.
- US tariffs on Asian-manufactured electronics.
- Elevated shipping expenses related to the Iran conflict.
The Switch 2's price is set to increase in the United States to $499.99 from September 1, up from the original launch price of $449.99, and in Japan to ¥59,980 from May 25, rising from the previous ¥49,980.
The memory cost increase is partly due to the AI-driven DRAM squeeze, which has lifted SK Hynix to record margins. This issue affects console makers, smartphone vendors, and PC OEMs similarly.
Nintendo's game pipeline for the Switch 2 is a key factor in market reaction. While the initial six months featured launch titles and popular franchises, the next year lacks confirmed first-party tentpoles. The lack of high-profile third-party exclusives has not yet translated into hardware sales.
The bear case predicts a decline in Switch 2 demand, mirroring standard console cycles. Conversely, the bull case suggests that Nintendo's deliberate pacing of releases could lead to stronger second-half sales, driven by anticipated flagship titles.
President Shuntaro Furukawa has expressed optimism, stating that the FY27 guidance is conservative and that price adjustments are necessary for sustained profitability.