Nintendo Co (OTC:NTDOY) posted strong fiscal 2026 results, but the gaming giant warned of weaker sales and profits ahead as rising component costs, tariffs, and pricing pressures weigh on its Switch 2 business.

Posts Strong Fiscal 2026 Results

Nintendo reported fiscal 2026 revenue of 2.31 trillion yen, nearly doubling from 1.16 trillion yen a year earlier, while net profit climbed 52.1% to 424.0 billion yen.

The company sold 19.86 million Nintendo Switch 2 consoles during the fiscal year. Nintendo Switch sales fell to 3.80 million units from 10.80 million units a year earlier.

Nintendo also continued to benefit from strong demand for its core entertainment franchises. “The Super Mario Galaxy Movie” generated nearly $900 million globally, while “Pokémon Pokopia” became one of the Switch 2’s top-selling games.

Raises Switch 2 Prices Globally

Nintendo said it will revise Switch 2 pricing during the fiscal year ending March 2027 and already included the expected impact in its financial forecast.

In Japan, the company will raise the price of the Nintendo Switch 2 Japanese-Language System to 59,980 yen from 49,980 yen starting May 25, 2026. In the U.S., Nintendo will increase the Switch 2 price to $499.99 from $449.99 beginning Sept. 1, 2026, while European pricing will rise to 499.99 euros from 469.99 euros on the same date.

Nintendo attributed the softer outlook partly to higher memory and materials costs, tariffs, and elevated shipping expenses tied to the Iran conflict. The company estimated those pressures would create a 100 billion yen hit to its business.

Analysts Flag Weak Outlook Amid Chip Crunch

Nintendo forecasts fiscal 2027 net sales of 2.05 trillion yen, down 11.4% year over year, while net profit is expected to decline 26.9% to 310.0 billion yen. The company also projected Switch 2 hardware sales of 16.50 million units, down 16.9% year over year, alongside a projected dividend cut to 162 yen from 219 yen.

Toyo Research Institute analyst Hideki Yasuda told Bloomberg that Nintendo typically starts the fiscal year with conservative guidance, but described the latest outlook as unusually weak. Yasuda added that while the price increases reflect broader macroeconomic pressures, weaker sales after the hikes could raise concerns about the Switch 2’s long-term appeal.

Kantan Games CEO Serkan Toto told CNBC that Nintendo had faced pressure from the memory chip crunch for months and noted that console sales usually rise in the second year, rather than decline as Nintendo now projects.

Nintendo now expects software sales to drive much of its earnings growth as global component shortages continue to pressure hardware production. The company also faces increasing competition ahead of the expected launch of Grand Theft Auto VI, which many expect will primarily benefit Sony Group Corp’s (NYSE:SONY) PlayStation 5 platform.

Nintendo Stock Sinks To 52-Week Low

NTDOY Price Action: Nintendo shares were down 7.47% at $10.90 at the time of publication on Friday. The stock is trading at a new 52-week low, according to Benzinga Pro data.

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