Nintendo shares plunged more than 10% in Tokyo after the company reported ¥806.3 billion in revenue for the quarter ended December 31, falling short of the ¥847.7 billion analysts had expected. This revenue figure, while representing an 86% year-on-year increase, failed to meet market estimates and sparked investor concerns about the sustainability of momentum for the recently launched Switch 2 console.

Nintendo warned that an unprecedented global shortage of memory chips—key components in its Switch and Switch 2 devices—has driven component prices significantly higher. Although President Shuntaro Furukawa stated that the impact on fiscal year results has been limited so far, he cautioned that sustained high memory costs could erode operating margins if the shortage persists into the next fiscal year.

Despite the revenue shortfall, Nintendo delivered net profit of ¥159.9 billion for the quarter, exceeding LSEG estimates of ¥147.3 billion and marking a 24% year-on-year increase. The strong bottom-line performance was driven by robust sales of the original Switch, which remains the company’s best-selling console, and early demand for the Switch 2 since its June 2025 launch.

Nintendo confirmed its full-year forecast of 19 million Switch 2 unit sales, unchanged from its November projection, and maintained an operating profit target of ¥370 billion. Investors will be watching the release schedule of key titles—"Mario Tennis Fever" in February, "Pokémon Pokopia" in March and the April debut of "The Super Mario Galaxy Movie"—to gauge whether Nintendo’s content pipeline can sustain console upgrade demand and offset rising component costs.