Nintendo’s share price dropped almost 8% on Monday as investors respond to the company’s overly pessimistic outlook for the Switch 2’s second year of sales. The slump took Nintendo’s share price to its lowest point in almost two years, after the company admitted it was feeling the squeeze from memory shortages and other market pressures.
On sales numbers alone the Switch 2 looks like a runaway success, but Nintendo isn’t confident that the console can maintain its momentum, especially with a price hike on the way. In its earnings release, Nintendo said that hardware shortages and the strong first-year sales would result in Switch 2 sales declining in its second year–which would be unusual as consoles are generally expected to gain momentum in their second year on the market.
As Nintendo stock continues its downward slide, Sony is up 10% following an earnings release that showed a drop in sales but a rise in profit. While Sony’s hardware sales are also feeling the impact of memory shortages, strong digital sales are carrying the company’s gaming segment.
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