Nintendo’s Switch era has an odd beat: the company just celebrated a huge milestone while investors nervously priced in a less certain future.
The original Nintendo Switch has now sold more than 155 million units since 2017, overtaking the DS as Nintendo’s best‑selling console and leaving it second only to Sony’s PlayStation 2 on the all‑time list. That stat explains why the brand still carries enormous cultural weight — it’s the hardware that rescued Nintendo after the Wii U and turned Mario, Zelda and Pokémon into global tentpoles during the Switch 1 years.
Why shares tumbled despite strong results
Yet the glow didn’t last long on the market floor. Nintendo’s latest results showed rising profits, driven in part by early Switch 2 sales, but shares plunged 10–11% after investors focused on two worries: the rising cost of memory chips and softer-than-expected momentum for Switch 2 outside Japan.
Memory is the headline worry. DRAM contract prices have spiked amid a global scramble to supply AI and data centers; some industry reports forecast quarter‑to‑quarter jumps approaching double digits (and analysts warn the shortage could persist through 2027). Nintendo told shareholders that the chip price surge hasn’t yet hit this fiscal year hard, but the company conceded prolonged high prices could bite margins down the line. Analysts point out Nintendo’s inventories and long‑term supplier contracts will cushion the blow for a while, but not indefinitely.
A tale of two markets: Japan vs. the West
Sales tell a more nuanced story than a single global figure. Switch 2 has been a commercial success overall — roughly 17 million units sold in its early months — and Nintendo has kept its full‑year hardware forecast. But regional breakdowns reveal gaps. The console is outperforming in Japan: local hits such as Pokémon Legends: Z‑A and Kirby Air Riders helped convert existing owners into upgraders during the holidays.
Overseas, the picture is quieter. Data compiled by market trackers suggested U.S. holiday sales for Switch 2 lagged the original Switch’s debut period by a sizeable margin; similar declines appeared in several European markets. Nintendo’s president acknowledged to shareholders that "overseas sales were slightly weaker than our expectations," a note that crystallized investor concerns about momentum and the importance of breakout first‑party titles.
That software pipeline is the calendar to watch. Nintendo needs a steady stream of hits — and fast — to turn curious buyers into enthusiastic adopters. The company is leaning on a mix of familiar franchises and new efforts: Mario Tennis Fever, Pokémon Pokopia and other 2026 entries are queued up, and Nintendo has been publicly reorganizing release timing and partner support to keep Switch 2’s catalog fresh. For more on how Nintendo is pacing its game releases, see how the company has reconfirmed its Switch 2 release schedule as third‑party support surged.
Between confidence and caution
Market reactions reflect a tension: the business is profitable and the new console sold briskly out of the gate, but assumptions that Switch 2 could outpace its predecessor immediately look optimistic. Industry commentators note Nintendo is in a different environment now — a more mature install base, higher hardware price points in some regions, and a chip market distorted by AI demand. All those factors make a repeat of the original Switch’s explosive uptake less likely.
Nintendo has resources to weather the turbulence. It maintained its annual forecasts and recorded quarter‑on‑quarter profit growth, and some analysts say concerns about Switch 2 profitability are overstated thanks to Nintendo’s conservative hardware margins. Still, shareholders want clarity on two fronts: the long‑term cost trajectory for memory chips and a clearer slate of blockbuster software to drive upgrades in the West.
If you’re tracking the franchise side of the story, Nintendo’s forecast updates and first‑party scheduling are useful context: the company recently raised Switch 2 forecasts as console sales surged, and the performance of flagship releases like Metroid — which has had a complicated reception this cycle — will matter more than ever (see traction ahead of Metroid Prime 4’s rollouts) [/news/metroid-prime-4-survive-trailer].
Nintendo’s moment is paradoxical: a record-setting past and a successful new console launch, paired with a market that’s suddenly wary about supply costs and whether the software heavy‑lifting will arrive in time. That tension is what will shape the rest of 2026 for the company — not just how many units it ships, but how much profit each one ends up delivering.