Nintendo has lost $14 billion in market capitalization. What are investors worried about?

Investors fear that a sharp rise in prices of components for game consoles will reduce Nintendo's profits, Bloomberg writes. Amid these concerns, on December 10, Nintendo shares were down 4.7% at the moment, to the lowest level since Ma 2025. Overall, Nintendo's securities have fallen for seven of the eight trading days in December - the market value of the company fell by about $14 billion, Bloomberg calculated.

Shares of Japanese gaming giant Nintendo were down nearly 4.7% on the Tokyo Stock Exchange in trading on December 10, falling to their lowest levels since Ma 2025. Investors fear that rising component prices, including, for example, memory chips, will begin to squeeze the company's profits. Against the backdrop of these concerns, Nintendo's securities have been falling in price for seven out of eight trading sessions in December, which has reduced the company's market value by about $14 billion, Bloomberg writes.

By the close on Dec. 10, the decline had slowed to 3.6 percent.

Nintendo is facing skyrocketing prices for built-in memory, one of the key components of any game console. This price increase affects two types of memory modules at once:

- RAM (Random Access Memory), which ensures the fast operation of the consoles and is responsible for their performance. According to analytics company TrendForce, the cost of 12GB RAM modules for Switch 2 rose 41% in the current quarter, Bloomberg points out.

- NAND modules, i.e. the console's built-in storage that stores games and updates. This technology has increased in price by almost 8% this quarter, and this increase automatically affects memory cards, which many users have to purchase due to the limited internal storage capacity of the Switch 2.

The rising cost of both types of memory modules puts double pressure on Nintendo, Bloomberg notes: the company has to produce the console more expensively, which cuts into its profits, and customers have to spend more on accessories, without which the new console is quickly out of favor. "Rising NAND prices are already having a serious impact on the cost of microSD Express memory cards. A 256GB card now costs $89.99 on Amazon. In effect, Nintendo has passed these costs on to customers," notes analyst Pelham Smithers of research firm Pelham Smithers Associates.

He adds that such memory cards become almost essential because of the Switch 2's limited onboard storage. Because of this, he says, third-party games - such as Electronic Arts - for Switch 2 actually cost gamers $20 more.

Adding to the market's unease with Nintendo was an unexpected price drop for the new console, Bloomberg notes. The Switch 2 launched as the fastest-selling gaming console in history. However, doubts remain as to whether the company can sustain interest in its console going forward, especially among gamers outside of Nintendo's loyal fanbase, Bloomberg writes.

"One of the surprises on Black Friday was an online promotion where the Nintendo Switch 2 c Mario Kart World bundle was offered at a $50 discount - essentially giving the game away for free," says Smithers. - You don't usually expect discounts like that right before the holidays.

This article was AI-translated and verified by a human editor