Key Takeaways
- Nintendo raised the Switch 2 price by $50 in the U.S. (to $499.99, effective September 1) and by ¥10,000 in Japan (to ¥59,980, effective May 25)
- NTDOY shares closed 8.4% lower in Tokyo on May 12, hitting their lowest point since August 2024, with year-to-date losses exceeding 34%
- Nintendo now forecasts only 16.5 million Switch 2 units for fiscal year 2027, down from 19.86 million shipped since the console’s June 2025 launch
- AI infrastructure demand has driven unprecedented memory chip price surges, squeezing hardware profitability across the consumer electronics sector
Nintendo’s decision to raise Switch 2 prices across its key global markets landed with a thud on Monday, rattling investor confidence and sending shares of the Kyoto-based gaming giant into a sharp decline.
The move, which follows a similar strategy by Sony, which hiked PlayStation 5 prices by up to $150 in March, confirms that the AI-driven memory chip squeeze has now reached the living room in full force.
For Nintendo, a company whose audience skews toward families and casual players, the timing carries real commercial risk.
A $50 Price Tag That Carries Far More Weight
Nintendo confirmed the Switch 2 will increase from $449.99 to $499.99 in the U.S. starting September 1, while Japan will see a sharper rise from ¥49,980 to ¥59,980 beginning May 25.
Canada and Europe are also facing price increases.
The company attributed the change to “changes in market conditions” and its “global business outlook,” though the underlying pressure appears tied to rising memory chip costs.
This move places Nintendo in a difficult position. It has long branded itself as the affordable, family-focused alternative to Sony and Microsoft, but a $500 console weakens that identity.
Nintendo’s core audience, families, kids, and casual gamers who pick up a console the way they might a gaming tablet, is particularly sensitive to price shifts, and higher price points risk shrinking that reach at a moment when the company can least afford it.
Wall Street Reacts: Stock at Two-Year Low
Markets did not take the news quietly. Nintendo shares fell 8.4% in Tokyo, the weakest close since August 2024, bringing total losses to 34% in 2026. The drop was deepened by weak financial guidance that missed expectations.
Nintendo now projects full-year revenue of 2.05 trillion yen, an 11.4% decline year-on-year and well below the 2.46 trillion yen analyst consensus from LSEG. Net profit is forecast to fall 27% to 310 billion yen, versus estimates of 418.5 billion yen.
Serkan Toto, CEO of Kantan Games, told CNBC the situation is structurally unusual, noting Nintendo is projecting Switch 2 hardware sales to decline this fiscal year instead of rising, which goes against typical new-console momentum.
Nintendo also flagged around ¥100 billion ($637.8 million) in added costs from rising components and tariffs.
The broader AI-driven memory crunch, reshaping data centers and consumer hardware alike, is now directly hitting Nintendo’s balance sheet.
Software Pipeline Raises Additional Questions
Beyond the price hike, investors are focusing on what comes next for software.
Nintendo has guided combined Switch and Switch 2 software sales at around 165 million units in fiscal 2027, about 11% lower year-over-year, raising concerns about confidence in its development pipeline.
Bernstein analyst Robin Zhu told Bloomberg that Nintendo’s “first-party pipeline remains the key,” while Morningstar’s Kazunori Ito questioned why software sales would be projected to decline during a console’s crucial second year.
Nintendo does have some momentum. Pokémon Pokopia sold over 4 million units shortly after launch, and Mario Kart World has shown strong early traction.
A Nintendo Direct revealing the 2026 lineup is expected as soon as next month, which could help shift sentiment ahead of the holiday season.
Whether Nintendo can turn things around depends largely on the caliber of releases it can put on the board, and with console-first gaming experiences reshaping player engagement, the pressure to deliver a compelling software year has rarely been higher.
Analysts at Asymmetric Advisors say Sony is better positioned to handle memory cost pressures due to its diversified entertainment portfolio, while Nintendo’s pure gaming focus, once a strength, is now a vulnerability.
Source: Nintendo plunges 8% after Switch 2 price hike and weak sales forecast
