The beloved Japanese gaming company Nintendo (TYO: 7974) suffered a 4.75% stock market drop during the March 24 session as the equity fell from ¥9,432 ($59.38) to ¥8,984 ($56.56).
This drop led to the firm’s shares being down 15.64% year-to-date (YTD) and almost entirely erased the 18% gains made between March 9 and March 13.
Why Nintendo stock is crashing
Nintendo’s latest downturn was triggered by faltering U.S. sales of the new Switch 2 console, and the company’s decision to cut production by a high 30%: from the previous 6 million to 4 million in the ongoing quarter.
Simultaneously, the reduction marks a sharp shift from the initial success of the console. Originally, Nintendo planned to ship 20 million units in the first year and, even though there was a slump in demand soon after the launch, sold as many as 17.7 million Switch 2s by December 31, 2025.
Considering that the device hit the shelves on June 5 – less than one year ago – the figures indicate that as many as 2.5 million were being sold every month for a quarterly average of more than 7.5 million.
Is Nintendo stock a buy in March?
Elsewhere, though the production target cut might appear to indicate Nintendo has hit a rough patch it will struggle to escape, the decision might also reflect a strategic pivot.
Specifically, relatively recent EU regulations mean that the company will have to begin delivering variants with replaceable batteries, meaning the reduction from 6 million to 4 million units could, along with a lack of U.S. demand, represent a greater emphasis on the European market.
Still, recommending Nintendo stock as an investment in March 2026 remains difficult. Whether or not the company manages to close the gap with a greater emphasis on the EU – that is, provided that speculation is proven correct – remains to be seen.
Additionally, while oil and fossil fuels have been grabbing the majority of headlines with regard to the Iran war, the region is a key supplier of numerous resources that are critical for the technology sector.
Under the circumstances, Nintendo could soon face industrial headwinds, while the likely spike in inflation arising from the conflict may lead to people having less money to spend on hobbies such as gaming.
Featured image via Shutterstock
