Nintendo (7974.T) tumbles 8% as Switch 2 price hike and sales cut shock investors

Nintendo (7974.T) fell roughly 8% on May 11, 2026 after the gaming giant announced a price increase for the Switch 2 console and revised its annual unit sales forecast downward, according to CNBC. The move reversed momentum that had been building around the much-anticipated hardware launch.

The immediate catalyst is a deepening memory chip supply crisis. NAND flash and DRAM prices have been rising on the back of explosive demand for AI training and inference hardware — including high-bandwidth memory (HBM) — while the ongoing Iran-Hormuz conflict has introduced additional supply-chain disruptions. Nintendo was unable to absorb these cost increases in full, forcing a retail price adjustment ahead of launch.

The sales forecast cut compounds the pricing problem. Higher prices reduce accessibility in cost-sensitive markets, particularly in Asia and Europe. Nintendo's long-term hardware upgrade cycle depends on converting the global Switch 1 user base into Switch 2 buyers. Any demand destruction from the price hike makes that cycle harder to execute.

Nintendo's earnings model is broader than hardware alone: software attach rates and Nintendo Switch Online subscriptions generate high-margin recurring revenue. A weaker-than-expected hardware install base, however, compresses the addressable market for first-party software and subscription services over a two-to-three-year horizon.

Key catalysts ahead: Switch 2 launch-window sell-through data and Q1 FY2027 earnings.

Not investment advice. Verify all figures with primary sources before acting.