Nintendo stock sinks in Japan, with concerns over lackluster Switch 2 games and price increase

Nintendo's once-soaring stock has faced a significant reversal in Japan, declining 33% from its August peak of 14,795 yen to 9,950 yen. This downturn follows initial strong Switch 2 sales at launch, with industry analysts pointing to two primary concerns: a lack of compelling first-party games driving hardware adoption, and fears of an impending price increase despite Nintendo's public hedging.

Dr. Serkan Toto, a prominent industry consultant, highlighted these issues publicly, noting the absence of seasonal discounts and expressing skepticism about Nintendo's near-term prospects. His comments reflect broader market anxiety that 2026 could become a challenging year for the gaming giant unless new system-selling titles emerge. Current software releases haven't matched the impact of flagship franchises like Mario or Zelda, leaving many potential buyers hesitant to upgrade.

Former Nintendo PR managers known as Kit & Krysta amplified these concerns, criticizing the company's apparent shift toward quantity over quality. Their analysis suggests Nintendo plans nine or more first-party Switch 2 titles in the coming year, but few appear positioned to drive significant hardware sales. This strategy contrasts sharply with previous Nintendo console cycles where major exclusive launches consistently boosted hardware momentum.

The holiday sales data underscores these challenges. Both PlayStation 5 and Switch 2 saw year-over-year declines during the critical November-December period, with Nintendo's new handheld failing to match the 2017 holiday pace of its predecessor. While economic pressures contributed, the absence of a must-have game like 2017's Breath of the Wild left the Switch 2 vulnerable. Discounts might have offset this weakness, but Nintendo maintained typical new-console pricing discipline, offering few promotions despite stagnant sales.

Compounding these issues are hardware cost pressures. Nintendo President Shuntaro Furukawa acknowledged memory shortages affecting the broader tech industry in a recent Kyoto Shimbun interview, stating Nintendo secured components proactively. However, he avoided confirming or denying potential Switch 2 price hikes resulting from tariffs or component inflation. This ambiguity fuels investor apprehension about future profitability if manufacturing costs rise without corresponding software sales to maintain demand.

Japan's market performance offers a microcosm of global concerns. Though Switch 2 sales remain relatively resilient there compared to other regions, and Nintendo offers a region-free hardware advantage, these factors haven't stabilized the stock. The situation reveals how dependent Nintendo remains on exclusive content to sustain its hardware ecosystem long term.

Looking forward, Nintendo's ability to reverse this trend hinges on two factors: announcing genuinely system-selling games that leverage the Switch 2's capabilities, and managing hardware pricing without alienating cost-sensitive consumers. Until these uncertainties resolve, investor caution appears warranted despite Nintendo's historically strong content development pipeline.

Source: Dr. Serkan Toto X account