On Thursday, June 5, 2025, Nintendo’s Switch 2 game console was exhibited at the Bic Camera electronics store in Tokyo. Nintendo fans from Tokyo to Manhattan waited in line for hours to be among the first to get their hands on the Switch 2, supporting the biggest global debut of the gadget since the iPhone’s launch last year.
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Nintendo’s stock price plummeted more than 10% on Wednesday, a day after the gaming giant missed market expectations for quarterly revenue and faced headwinds from unprecedented memory shortages.
However, the company exceeded profit expectations, posting a 24% year-over-year increase in sales, helped by sales of the Nintendo Switch, which has become the company’s best-selling game console since its release in 2017. Sales increased by 86%.
Nintendo is facing pressure this year from rising prices due to a shortage of memory chips, a key component for game consoles.
Investors remain concerned about the impact memory costs will have on the company’s profits, said Andrew Jackson, head of Japanese equity strategy at Altus Advisors.
Nintendo President Shuntaro Furukawa said on Tuesday that rising memory prices have not had a major impact on the company’s results this fiscal year, but that it could affect profitability if component costs remain high over the long term.
Nintendo primarily uses Dynamic Random Access Memory (DRAM) in its gaming consoles. This type of memory is experiencing a shortage due to the increasing demands of AI and data centers.
Contract prices for conventional DRAM chips are expected to rise 90% to 95% in the first quarter of this year compared with the previous three months, according to a Monday report from market research firm TrendForce.
Last month, a top semiconductor industry CEO told CNBC that the memory chip shortage is expected to last until 2027.
Despite the memory shortage, Nintendo on Tuesday kept its full-year sales forecast for the Switch 2 unchanged. However, it remains to be seen whether the company’s pipeline of upcoming Switch 2 games will be enough to convince consumers to upgrade to the latest console, which launched last June.
Nintendo plans to release Mario Tennis Fever for Switch 2 in February and Pokémon Pokopia in March. These two titles are from the company’s most popular series.
The company also plans to release “Super Mario Galaxy Movie” in April. The first Super Mario movie, released in 2023, significantly boosted sales of Nintendo’s console, and the company is likely hoping for a similar effect with the Switch 2.
On Tuesday, Omdia senior analyst James McWhirter told CNBC that 2026 will be a “make-or-break” year for the future of the Switch 2 as Nintendo looks to gain more mass-market appeal.
Nintendo’s stock price has fallen more than 15% since the beginning of the year.
—CNBC’s Arjun Kharpal contributed to this report.
