"Awful News": Nintendo Shares Get 'Donkey Konged' After Switch 2 Production Cut
Nintendo shares in Tokyo tumbled overnight after Bloomberg reported that the gaming company has slashed production of the Switch 2 handheld amid soft holiday-season demand and underwhelming U.S. sales.
*NINTENDO CUTS SWITCH 2 OUTPUT BY OVER 30% ON WEAK HOLIDAY SALES
— zerohedge (@zerohedge) March 24, 2026
wait, wasn't this thing supposed to be as popular as chatgpt?
Nintendo is expected to produce 4 million Switch 2 units instead of the originally planned 6 million, with the lower production rate expected to continue into the second quarter.
Despite a record June 2025 launch and 17.37 million units sold since release, management appears disappointed that momentum and hype for the Switch 2 have faded. Japan has held up better than overseas markets, helped by a cheaper domestic-only variant, while U.S. demand has been soft.
"This hardware shortfall in its first year, during its big holiday season, is awful news," Asymmetric Advisors analyst Amir Anvarzadeh wrote in a note.
Sources noted that the output reduction should not affect Nintendo's ability to meet the average Wall Street analyst estimate of about 20 million Switch 2 units sold in the fiscal year through this month.
A soft U.S. market is yet another concern for Nintendo, as soaring memory chip costs squeeze margins and may force a price hike that could further crimp consumer demand.
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The lack of a robust software pipeline has failed to energize consumers.
Anvarzadeh said, "Clearly, the software lineup has been poor, at least until most recently, with Pokémon showing some hope."
The market reaction in Tokyo was negative following the BBG report, with shares closing down nearly 5%. For the year, shares are down 15.2% and nearly 39% from the peak in late summer 2025.
The big takeaway is that Nintendo is not facing a launch failure, but it is struggling to sustain excitement around the device - perhaps because of software issues and the lack of a robust gaming pipeline. Wait to see what happens to demand if Nintendo is forced into a price-hiking cycle because of the memory crunch.