The “Super Mario” maker maintained its annual revenue and hardware forecasts, which were seen as disappointing for the market. “The results are good with the Switch 2 breaking records,” but “not great,” Jefferies analyst Atul Goyal wrote in a client note.
Investor enthusiasm about the prospects for a successor to the wildly popular Switch helped push the shares to a record high last year, but they have been falling since November.
The early momentum for the Switch 2, which launched in June, is considered crucial for building a user base to ensure the system’s long-term strength.
“The run has just begun and the platform is growing rapidly,” Goyal wrote. Nintendo extended the life of the original Switch with blockbuster titles, including two major titles in “The Legend of Zelda” franchise.
Investors are also concerned about the impact that rising memory chip prices will have on Nintendo’s margins.
The company said the price increase will not have a significant impact on this fiscal year’s profit, but could put pressure on profitability if high prices persist in the long term.
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