At Nintendo, a Banner Year Meets Costly Headwinds and a Changing of the Guard

Net profit surges 52% but shares hit 52-week low as cost inflation from AI boom and tariffs add 100B yen; Switch 2 price hikes, hardware sales forecast down 17%, and designer Tezuka to retire.

Nintendo has posted some of the strongest financial numbers in its history, yet the market has greeted the results with a shrug — or worse. Net profit surged 52 percent to 424 billion yen, while revenue doubled to 2.3 trillion yen, driven by the first full year of Switch 2 sales. But the shares listed in Frankfurt sank to a 52-week low of 36.70 euros, a decline of nearly 56 percent from the August peak of 85.22 euros and down 37 percent since the start of the year.

The culprit, as President Shuntaro Furukawa made clear, is a perfect storm of cost inflation. Higher prices for RAM and SSD storage — fuelled by the global AI boom — plus US tariffs and geopolitical friction have added roughly 100 billion yen to Nintendo’s material and logistics bill. The company has responded with price hikes for the Switch 2, though Furukawa conceded they do not fully offset the burden. In Japan the console will jump from 49,980 to 59,980 yen from 25 May, prompting queues of around 300 people at retailers like Yodobashi Camera in Umeda as shoppers scrambled to buy at the old price. Bic Camera restricted sales to holders of its own credit card to manage demand. Western markets will see adjustments on 1 September: US gamers will pay $499.99, Europeans €499.99.

For the current fiscal year, Nintendo is bracing for a dip in hardware sales — down nearly 17 percent to 16.5 million units — while betting on software to fill the gap. The target is 60 million software units, a rise of over 23 percent. Early signs are encouraging: Mario Kart World has sold 8.85 million copies, Tomodachi Life moved 3.8 million in its first fortnight, and the Super Mario Galaxy Movie has grossed more than $800 million worldwide, proving Nintendo’s ability to monetise its IP far beyond the console.

Yet a profound change is unfolding in Kyoto. Takashi Tezuka, the legendary designer behind Super Mario World and The Legend of Zelda, will leave the company on 26 June 2026 after 42 years. At 65 he reaches Nintendo’s typical retirement age, and the company has not named a direct successor. That absence of an obvious creative leader is viewed by some as a vulnerability at a moment when the hardware cycle is entering a more competitive phase.

To drive software momentum, Nintendo is reviving classic franchises. The upcoming slate for Switch 2 includes Yoshi and the Mysterious Book in May, a Star Fox remake on 25 June, and Splatoon Raiders in July. The timing is tight: Tezuka’s farewell comes the day after the Star Fox release, leaving the imprint of his generation on the product line one last time.

Analyst Hideki Yasuda of Toyo Research called the price increases a necessary step to protect margins but warned that consumer demand in the second year of a console lifespan is often unpredictable. The US-listed ADR NTDOY, which closed at $10.45, actually gained 3.6 percent on the day of the earnings release — a sign that some investors appreciated the transparency, even as the broader trend for the stock remains firmly negative. Whether the pre-price-hike buying frenzy in Japan can stabilise hardware momentum in the near term will become clearer in the weeks ahead.