Nintendo Stock Sees 33% Drop Despite Record Switch 2 Sales — Here’s Why Investors are Worried

Nintendo’s stock price has fallen sharply – about 33% in the last five months – despite a successful launch of its newest gaming console. While the launch went well, investors are starting to worry about the company’s future, particularly what will happen in 2026. This unexpected stock drop has left many people wondering what’s going on.

Nintendo’s stock price finished around ¥9,950 in mid-January, a significant drop from its peak in the latter half of 2025. This decline happened even though the new Nintendo Switch 2 had a very successful launch, becoming Nintendo’s fastest-selling console ever with about 3.5 million units sold in its first four days.

Record Hardware Sales Weren’t Enough

The launch of the Switch 2 seemed positive for investors. Nintendo actually increased its sales prediction for the console to 19 million units this year, a rise from its previous estimate of 15 million.

However, markets tend to look forward, not back.

I was really excited when the Switch 2 launched, and a lot of people were too! But honestly, things seem to be slowing down a bit, especially heading into the holidays. I’m hearing that sales in places like the US and Europe aren’t as strong as the first Switch was during its first Christmas. It makes me wonder if everyone who really wanted one bought it right away, and now demand isn’t keeping up. That’s probably why Nintendo’s stock price dropped – it’s a bit concerning, to be honest.

Thin 2026 Software Slate Raises Red Flags

Adding to the reasons Nintendo’s stock price is falling is concern about what games the company will release in 2026.

As a big Nintendo fan, I’ve been checking out their announced games, and honestly, I’m a little worried. They haven’t revealed a huge, must-have title yet – something like a new Mario Kart or Zelda that would really define the year. Historically, Nintendo does best when they have these massive first-party games. It’s not just about selling the Switch console itself; it’s those blockbuster games that keep people playing and buying more software. They really need one of those to have a great year.

Currently, investors don’t seem to believe Nintendo has announced a game that will significantly boost sales later in the year.

Rising Component Costs and Pricing Pressure

Beyond content concerns, Nintendo is also facing external cost pressures.

The cost of memory, especially DRAM, has gone up sharply because companies working on artificial intelligence are buying large quantities, making it harder for everyone else in the tech industry to get enough. This is worrying console makers, who may have to either pay more to produce their systems or increase prices for customers.

Even Nintendo, usually careful with its production planning, is facing potential challenges. Analysts are increasingly worried the next Switch might cost more, particularly if the price of essential parts stays high through 2026.

Tariffs and Margin Concerns

Trade policy is also a concern. Current and possible tariffs on imported goods and manufacturing create uncertainty for electronics companies around the world.

Nintendo president Shuntaro Furukawa has stated that the company’s profits are significantly affected by things like the cost of materials, changes in exchange rates, and taxes – all of which are currently unstable. This adds more worry for investors who are already concerned.

Investor Sentiment Turns Cautious

The recent drop in Nintendo’s stock price isn’t due to serious problems with the company itself, but rather a change in how investors feel about it. Nintendo is still making a profit, remains a hugely popular brand, and owns some of the most valuable franchises in the entertainment industry.

But markets are signaling concern over:

Slowing post-launch hardware demand
An unproven 2026 release calendar
Rising production costs
Uncertainty around pricing and margins

Investors seem to be holding off on making any moves until Nintendo offers more concrete information, probably through announcements of new games or updates on its financial performance.

A Critical Year Ahead

Nintendo has faced challenges in the past, and while a 33% drop in stock price is concerning, it’s not necessarily a sign of failure. However, 2026 will be a critical year for the company. To recover, Nintendo needs to deliver impressive presentations, clearly outline its future game releases, and assure customers about pricing.

For now, the market is sending a clear message: record launches alone are no longer enough.

2026-01-21 20:57