Nintendo’s stock fell over 10% in Tokyo trading after the company reported quarterly revenue that fell short of analyst forecasts. While operating profit jumped 24% year-on-year, driven by sustained demand for Switch consoles, total sales growth of 86% failed to satisfy market expectations. Investors reacted sharply to the top-line miss, pushing the share decline despite impressive profit growth.

Management warned that an ongoing global shortage of high-density memory chips is driving component costs higher. Although Nintendo President Shuntaro Furukawa stated that the immediate impact on full-year results remains manageable, he cautioned that prolonged elevated chip prices could weigh on margins. Industry data shows PC DRAM spot prices up more than 50% year-to-date, underscoring the risk to console production economics if supply conditions do not improve.

Nintendo reaffirmed its full-year Switch 2 sales forecast, but stressed the importance of its release schedule to sustain momentum. Key launches scheduled this spring include a new entry in its flagship Mario Tennis franchise and the next mainline Pokémon title. The company also plans to leverage the upcoming Super Mario Galaxy movie in April, hoping to replicate the previous film’s lift in hardware sales. Analysts warn that 2026 will be a pivotal year to prove Switch 2’s appeal in a competitive gaming market.