Nintendo Co., Ltd. shares fell around 7% in Tokyo on Monday after the company raised prices for its Switch 2 console and issued an outlook that disappointed investors, raising concerns about its upcoming game pipeline.
The Kyoto-based gaming giant posted strong hardware sales for the financial year ended March, but its forward guidance failed to meet market expectations, weighing on investor sentiment.
The company, known for its traditionally conservative forecasts, extended the life cycle of its original Switch through major titles from franchises such as The Legend of Zelda, while also delivering hits like “Pokopia.”
However, analysts say Nintendo appears to be lacking major blockbuster releases in the near term, which has intensified concerns about momentum for its new console generation.
“The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline,” said Morningstar analyst Kazunori Ito, though he added that the outlook may be overly pessimistic given typical second-year console cycle growth.
Nintendo Co., Ltd. also announced price increases for the Switch 2, with the Japan-only model rising by 10,000 yen ($63.73) to 59,980 yen from May 25, while price adjustments in other markets, including the United States, will take effect from September 1.
The company faces added pressure as its core audience of casual gamers is considered highly sensitive to price increases, especially amid rising global component costs, including memory chips.
Analysts remain divided on Nintendo’s outlook, with some expecting a major game release to boost demand.
Jefferies analyst Atul Goyal suggested that a “Mario AAA game” could arrive this year, which may significantly improve sentiment around the console cycle.
Nintendo’s business model remains heavily dependent on its gaming division, unlike diversified rivals such as Sony Group Corporation, which saw its shares rise about 10% in Tokyo.
Sony has forecast lower sales but higher profits in its gaming segment and is also pursuing cost-control strategies, including a new joint venture with TSMC to develop and manufacture image sensors in Japan.
Analysts say Sony is better positioned to manage rising component costs due to its broader business structure and ability to pass costs to consumers.
Despite short-term pressure on Nintendo, some analysts believe the company’s historical pattern of conservative guidance may still leave room for upside surprises in the coming fiscal year.
