Japan's Nintendo saw its market capitalization fall by roughly $14 billion after its share price dropped 4.7% — the steepest single decline since May 2025, according to financial reports. The fall reflects investor concern about rising hardware costs and shrinking profitability for the company's latest portable console.
The immediate cause of the rout was a shortage of DRAM used in the new handheld. Manufacturing costs for the 12 GB of RAM used in the Switch 2 jumped about 41%. Meanwhile, the memory cards and the controller chips for those storage modules became roughly 8% more expensive. Those higher component costs turned the fourth quarter of 2025 into a loss-making period for Nintendo's newest console generation.
Analysts say Nintendo has partially shifted the burden onto consumers. External storage prices for the Switch 2 have risen sharply in online marketplaces, with 250 GB cards reaching roughly $90. Industry observers suggest Nintendo may respond by raising the console's retail price after the winter holidays to help restore margins.
The DRAM shortage emerged in late 2025 as large-scale AI and neural-network data centers began buying up vast amounts of memory and storage drives. That surge in demand created supply bottlenecks and pushed up component prices across the electronics industry. Earlier in the year, one major memory manufacturer announced it would stop producing certain consumer DRAM and redirect production capacity toward data-center chips, further tightening supplies for consumer devices.
The combination of soaring component costs and constrained supplies has wider implications for the gaming hardware market: manufacturers may face sustained margin pressure, consumers can expect higher accessory and peripheral prices, and device makers might accelerate design changes to use alternative parts or seek other suppliers to mitigate future shocks.