Nintendo shares plunged more than 10% on Wednesday, a day after the gaming giant missed market estimates for quarterly revenue and as it faces headwinds from an unprecedented memory shortage.
The company beat profit estimates though, clocking a 24% jump year on year, bolstered by sales of its Nintendo Switch — now the company’s best selling console ever following its release in 2017. Revenue rose 86%.
Nintendo is facing pressure this year from a shortage in memory chips — a key component in its gaming consoles — that has resulted in surging prices.
According to Andrew Jackson, head of Japanese Equity Strategy at Ortus Advisors, investors remain concerned about the impact that memory costs will have on the company’s margins.
While Nintendo President Shuntaro Furukawa said Tuesday that memory price rises were not significantly impacting results for the financial year, he said it could impact profitability if the component costs remain high over the longer term.
