Nintendo Shares Sink Into Bear Market as Chip Costs Squeeze Margins

Nintendo shares plunged into a deeper bear market after the company's full-year operating income forecasts missed Bloomberg consensus estimates. The gaming giant reported fourth-quarter operating income of 59.72 billion yen, falling short of the 74.78 billion yen anticipated by analysts. According to reports, the company warned that surging memory prices and potential tariffs could impact the business by approximately 100 billion yen ($640 million).

The margin squeeze comes as the global gaming sector grapples with supply chain headwinds and rising component costs. Peer comparisons show that Sony has also faced volatility in its gaming division due to production expenses, per market data. Analysts from Goldman Sachs noted that slowing software sales—a primary profit driver—are compounding the structural pressure on margins as the market awaits the successor to the Switch console.

Investors should watch for technical support levels following this decline, with a focus on updates regarding the 'Switch 2' launch timeline. Looking ahead, traders will monitor the Bank of Japan's Monetary Policy Meeting Minutes (at close 2026-05-06) for insights into yen volatility, which significantly impacts Nintendo's repatriated earnings, alongside upcoming industrial production data for broader manufacturing sentiment.