Nintendo Shares Stumble on a Shortage No Game Can Fix
Synopsis
Investors in Nintendo are feeling a little jumpy as the company’s stock plunged 10% on Wednesday. Gaming giant Nintendo is being squeezed despite booming profits and the runaway success of the new Switch 2, with a colossal shortage of memory chips. And prices for these parts, which are expected to double in price because of the high demand from A.I. companies, could force Nintendo to raise console prices, experts are concerned. As it approaches a “make or break” year, all eyes are on Zelda, new Mario and Pokémon games in the pipeline to keep its momentum going.
TOKYO — The world’s best-known video game company is off to a rough beginning in 2026. Shares in Nintendo plummeted by more than 10 per cent on Wednesday, a sell-off that wiped billions off the value of the company. The drop followed the company’s missing sales targets and a warning that a worldwide shortage of memory chips is making it far costlier to make its consoles.
Nintendo is making lots of money, its profits are up 24% from the new Switch 2, but investors are concerned about the long view. Boards using the same chips as Nintendo’s consoles are today being picked up by artificial intelligence companies and data centres, with the gaming industry competing for parts against both of them at premium prices.
Will inflation in the cost of technology force Nintendo to increase the price of its consoles?
The gamers are at the mercy of the AI boom
At the heart of all, is a component known as DRAM, or dynamic random access memory, which your console needs for playing games without hiccups. Thanks to the huge explosion in A.I. technology, demand for these chips has grown like never before. Recent reports would have us believe that the price of these parts could increase by as much as 90 per cent or more in only a few months this year.
Nintendo’s president, Shuntaro Furukawa, conceded that the high costs haven’t hurt them yet, but they could hit profits significantly if prices remain high for a while. But as Nintendo developed Switch and worked with its partners to salvage the product’s defects, those savings appeared more tenuous. At some point a new balance of power between hardware and software makers will have to be found: “If they can’t get costs down, they may pass it on,” he said. An increase in price on the Switch 2 could be a hard pill for a company that depends on “casual” families and kids to swallow.
A ‘Make-or-Break’ Year for the Switch 2
Last June, the Switch 2 was launched and is now in the mainstream of its work. But analysts say the console is a “victim of its own success.” The original Switch was so popular that it’s incredibly challenging for the new machine to generate the same excitement.
Investors are monitoring “momentum”, in other words, they want to know if people are still eager to buy the console a year after its release. It is those stars that Nintendo will have to rely upon to keep the magic alive. In the next few months, the company has several big projects coming:
• Mario Tennis Fever in February.
• Pokémon Pokopia in March.
• The Super Mario Galaxy Movie in April.
The Road Ahead for 2026
2026 is the year that will ultimately make or break the Switch 2, according to analysts. If the new games and movies can persuade millions of people to upgrade their old systems, Nintendo could rebound. But if the chip shortage persists, lasting as long as 2027 in some forecasts, then the company is going to have to make money and not alienate its fans.
For the moment, the stock market is nervous. Nintendo’s shares have already dropped about 15% this year. Now the company is banking that a plumber with a red hat and a clutch of pocket monsters will help it regain the world’s investment dollars.
Key Highlights
- Shares of Nintendo dropped 10 per cent amid fears that costly memory chips would hurt profits.
- Memory prices are set to double as AI companies monopolise the world’s supply.
- Future Mario and Pokémon games are considered crucial to maintaining the Switch 2’s success.
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At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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