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(Sharecast News) - Nintendo shares fell sharply on Monday after the Japanese games maker issued a weaker-than-expected outlook, raised Switch 2 prices and warned that higher memory costs and tariffs would weigh on margins.
The Kyoto-based company forecast Switch 2 hardware sales of 16.5 million units for the financial year ending March 2027, down from 19.86 million units sold since the console's launch last June.
It also projected software sales across the original Switch and Switch 2 of 165 million units, implying an 11% year-on-year decline.
The guidance disappointed investors, with Nintendo shares closing 8.44% lower in Tokyo to their lowest price since August 2024.
The shares had fallen more than 30% since the start of the year.
Nintendo said it expected a JPY 100bn (468m) impact this year from higher memory prices and US tariffs.
The company announced price increases across the Switch 2, the original Switch, online subscriptions and playing cards, with the Japanese-language Switch 2 model rising by JPY 10,000 to JPY 59,980 from 25 May and US prices set to increase from 1 September.
The increases came as electronics makers face a surge in memory chip prices, driven partly by demand from AI infrastructure, as well as higher shipping and tariff costs.
Nintendo was particularly exposed because it remained heavily dependent on its core games business, unlike Sony, whose more diversified operations helped support its shares after its own results.
Nintendo had early successes with titles including Mario Kart World and Pokmon Pokopia, which CNBC said sold more than four million units in the five weeks after its March release.
However, investors were waiting for more detail on the company's first-party game pipeline, especially major releases from franchises such as Mario and Zelda.
Demand for the Switch 2 reportedly remained robust despite the cautious outlook, with Bloomberg reporting long queues at electronics stores in Japan after the price announcement and inventory at many online and physical retailers selling out over the weekend.
At the close on Monday, shares in Nintendo were down 8.44% in Tokyo at JPY 7.020.
Reporting by Josh White for Sharecast.com.