Nintendo shares dropped 10-11% despite strong sales and profits, as investors worry about future growth due to high chip costs and weak software demand.

Nintendo shares fell 10-11% amid investor concerns over the Switch 2’s long-term growth, despite strong sales of 17.4 million units by December and a 23% quarterly profit increase. The company maintained its full-year forecast of 19 million console sales and 350-370 billion yen in profit, citing stable supply from long-term contracts and high inventories. However, rising memory chip prices—driven by AI demand—are seen as a future threat to margins, though current impacts remain limited. Analysts note weak software sales and a lack of major new titles are dampening sentiment, even as upcoming releases like Mario Tennis Fever are expected to help sustain momentum.