Nintendo president says memory shortage may pressure profitability, seeks stable supplies

Nintendo president Shuntaro Furukawa told investors in an earnings question-and-answer that rising memory prices are a growing risk to the company's hardware profitability and that the firm is working to secure stable supplies of memory components. Furukawa said the firm is engaging in long-term discussions with suppliers to maintain a steady intake of chips and that memory prices are "happening at a pace that exceeds our expectations."

Furukawa framed the risk in time-bound terms. "If this rise in component prices lasts longer than expected and runs through the next fiscal year and beyond, it may put pressure on profitability. If the situation deteriorates significantly, we will carefully assess market trends and respond," he said. He also cautioned that no decision has been taken on changing Nintendo Switch 2 pricing. "Any decision to change the price will be determined comprehensively, taking into consideration not only profitability, but also other factors like the platform’s installed base, sales trends, and the market environment."

For now Nintendo expects only limited effects on near-term results. Furukawa said the price moves did not have "a significant impact on hardware profitability in the third quarter," and he does not expect Q4 results to be affected. He repeated the company focus: "What we are focusing on is profitability on a global basis," and argued that "in general, the profitability of hardware tends to improve with economies of scale, and we want to continue to reduce costs as much as possible through mass production of Nintendo Switch 2 hardware."

The warning comes as memory markets show dramatic volatility. Market researcher TrendForce projected contract prices for conventional DRAM chips in the first quarter could rise 90 to 95 percent versus the prior three months, and senior semiconductor executives have warned the shortage could persist through 2027. Those dynamics helped drive investor concern; shares plunged more than 10 percent after the company missed market revenue estimates and investors weighed the margin impact of rising component costs. Andrew Jackson, head of Japanese Equity Strategy at Ortus Advisors, said investors "remain concerned about how higher memory prices could affect profitability." Industry commentator Serkan Toto added, "If the current trend in the memory space continues, I would not be surprised at all to see Nintendo raising prices."

Nintendo’s hardware rollout and software slate complicate the picture. Switch 2 sales have outpaced some expectations, with company commentary saying consumers in Japan transitioned to Switch 2 at a relatively higher rate after holiday releases such as Pokémon Legends: Z-A - Nintendo Switch 2 Edition and Kirby Air Riders. Published tallies differ slightly: the company was said to have sold "more than 17 million" units through December 2025, while another count placed Switch 2 sales at 17.4 million as of December. Analysts have pointed to softer Switch 2 software volumes as a factor in operating profit performance; Nomura analyst Naruhito Miki said third-quarter operating profit "undershot the brokerage’s estimate due to lower sales volumes of Switch 2 software titles, leaving 'a somewhat negative impression.'"

For workers, the immediate effects will land on procurement, logistics and manufacturing teams tasked with securing parts and managing supplier contracts, and on production staff in China and Vietnam where much assembly occurs. Retail, marketing and customer-support teams could face pressure if higher costs force pricing changes, and software teams will be counted on to sustain an installed base through regular new releases and updates.

Next steps to watch include any formal supply agreements or hedging moves from Nintendo, updated sales and profit figures that reconcile varying published metrics, and March quarter industry pricing reports from TrendForce. For employees, the coming months will determine whether the shortage remains a procurement challenge or becomes a companywide margin issue that prompts broader operational changes.