Pixels in Orbit
newsMay 11, 20266 min read
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Nintendo Stock Just Cratered Again on Monday

Nintendo shares fell as much as 10% in Tokyo on Monday — a second straight session of losses after Friday's earnings — pushing the stock to a 21-month low. The trigger: a 16.5 million Switch 2 forecast, a dividend cut to 162 yen, and a 100 billion yen hit from the AI-driven DRAM chip surge.

Nintendo Stock Just Cratered Again on Monday

Nintendo's stock just had its second brutal session in three trading days. Shares of 7974.T opened sharply lower in Tokyo on Monday, May 11, 2026, and fell as much as 10% intraday before settling near the lows around 6,980 yen — down from Friday's close of roughly 7,667 yen and the stock's lowest level since August 2024. That extends the post-earnings rout that started Friday, when Nintendo's FY27 outlook landed and the market began pricing in just how much the AI-driven memory chip squeeze is going to hurt the second year of the Switch 2 cycle.

By the close, analysts estimated roughly $14 billion in market value had evaporated across the two sessions. Nintendo is now down more than 15% on the year and has roughly halved from its 2025 high of around 14,795 yen.

What the FY27 guidance actually said

The trigger isn't the Switch 2 launch year, which Nintendo just closed out comfortably. FY26 (ending March 31, 2026) saw the console ship 19.86 million units — actually ahead of the original Switch's 15 million in its first ten months. The trouble is what comes next. Nintendo's FY27 forecast asks investors to swallow:

Console makers don't usually forecast a hardware decline in year two. Nintendo's doing it because it's been forced to.

The memory chip squeeze is the real story

Nintendo's own deck pinned the softer outlook on three lines: "higher memory and materials costs, tariffs, and elevated shipping expenses tied to the Iran conflict." Combined hit: roughly 100 billion yen shaved off the business in FY27.

The memory line is the worst of the three. Contract DRAM prices are projected to rise 90% to 95% in the first quarter alone, driven by AI data center demand chewing through every available wafer. Switch 2's custom Nvidia SoC and its onboard memory are caught directly in that wake — and unlike Sony, which can amortize PS5 memory across a five-year-old install base of more than 80 million units, Nintendo is buying memory at peak prices for a console that's still in its hardware ramp. Bloomberg's read was blunt: Sony is positioned to pass DRAM costs through; Nintendo, mid-launch, isn't.

The price hikes confirmed Friday

Nintendo's response, announced alongside the earnings: raise prices everywhere. Japan first, the rest of the world four months later.

That a console maker is hiking the launch price mid-generation is, in itself, the headline. It almost never happens. Sony nudged PS5 pricing once in Japan and Europe in 2022, but the structural reason — currency and inflation — was different from what's happening here. Nintendo is raising prices specifically because the cost-of-goods curve refuses to come down.

The pipeline problem analysts are circling

If the memory squeeze is what triggered the sell-off, the missing first-party software is what's keeping investors out. Industry analyst Daniel Ahmad summed up the room: "Price increase, lower hardware sales forecast, and lack of visibility on software pipeline have investors spooked."

Morningstar was harsher: "The year-on-year decline in game shipment guidance risks signaling that Nintendo lacks confidence in its pipeline." Jefferies took the contrarian seat: "Our non-consensus view is that it will release a Mario AAA game this year." The unspoken implication — that the only thing keeping the bull case alive right now is a Mario reveal Nintendo hasn't announced yet — is exactly what worries the bears.

The confirmed Switch 2 first-party slate through summer reads as solid but not flagship:

What's not on that list and what investors are watching for: a mainline 3D Mario, a new Pokemon mainline pair, a confirmed Zelda follow-up, or a Switch 2 remake of one of the all-time-beloved games (Ocarina of Time chatter has been loud). A June Direct is widely expected. Until then, every analyst note is going to repeat the same word: pipeline.

The strange part: Switch 2 is still selling well

The dissonance with Monday's stock action is that Switch 2 isn't actually failing. 19.86 million units in roughly ten months is better than the original Switch managed in the same window — and the original Switch went on to sell 155.92 million lifetime, the second-best-selling home console of all time. President Shuntaro Furukawa pointed at that comparison in the earnings call, noting the platform is "trending ahead" of its predecessor and that the FY27 number is a function of pricing and component costs, not demand.

The market didn't buy that framing. With a price hike, a dividend cut, a profit decline, and a year-on-year hardware decline all landing in the same outlook, the read across Tokyo was that Nintendo had just confirmed a margin-compressed year — and that nothing in the confirmed software slate is large enough to offset it. The stock hitting an August-2024 low on Monday is the market saying it agrees.

What to watch from here

Three things move the stock back: a Mario reveal at the next Direct, evidence that DRAM pricing has peaked, or signs that the Japan-first price hike on May 25 didn't crater pre-orders. Until at least one of those lands, the path of least resistance for 7974 stays down.

Furukawa's exact line in the earnings call was that the team's job now is to make sure customers still feel the Switch 2 is good value at $499.99. That's a tough sell. But it's also a sell Nintendo has made before — and the lifetime sales of the original Switch suggest the audience is, eventually, willing to pay.

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