Nintendo Shares Fall 10% on Memory Shortage Concerns After Revenue Miss

Shares of Nintendo fell more than 10% on Wednesday after the gaming company missed quarterly revenue estimates and warned of risks linked to rising memory chip costs.

The share drop came despite strong year-on-year growth. Nintendo reported an 86% increase in revenue and a 24% rise in profit, supported by continued demand for its Switch consoles, now the company’s best-selling hardware since its launch in 2017.

Investor sentiment weakened as concerns grew over a global shortage of memory chips, a critical component used in Nintendo’s gaming consoles. The shortage has driven up prices and raised questions about future margins.

According to market analysts, investors remain cautious about how sustained increases in memory costs could affect Nintendo’s profitability. While company executives said current price rises have not significantly impacted this financial year, they warned that prolonged cost pressures could weigh on earnings.

Nintendo mainly relies on dynamic random access memory (DRAM), which is currently in short supply due to increased demand from artificial intelligence systems and data centres.

Market researcher TrendForce said contract prices for conventional DRAM chips in the first quarter of 2026 are expected to rise by 90% to 95% compared with the previous quarter. Industry executives have warned the shortage could continue until 2027.

Despite these challenges, Nintendo maintained its full-year sales forecast for the Switch 2 console, which was released in June last year. Analysts said the success of upcoming game releases will be critical in sustaining consumer interest.

Nintendo plans to launch Mario Tennis Fever in February and Pokémon Pokopia in March, both for the Switch 2. The company is also set to release The Super Mario Galaxy Movie in April, following the success of its previous Mario film in 2023, which boosted console sales.

So far in 2026, Nintendo shares are down more than 15%.