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(Image credit: Getty / Kazuhiro Nogi) Something's rotten in Mushroom Kingdom, and this time around it's not Bowser's fault. Nintendo's stock price took a 4.7% nosedive today , due to predictions that the Japanese console maker won't be able to keep its profit margins as high as expected. As has become the norm these days, the fear is caused by the ongoing RAM and chip availability crisis, as AI datacenters grab any transistor that's not nailed to the floor.
The latest dip wiped $14 billion off Nintendo's market cap and brought the stock roughly to its May price, eroding gains made since then. It's also the second hit in as many days, with the weekly drop being about 9.8%. The production cost for the Switch 2 has risen substantially, given that it uses 12 GB RAM chips whose cost has reportedly risen by 41% in Q4 alone.
Adding insult to injury, the NAND flash onboard the console also saw an 8% aggravation. Bloomberg notes that this rise in storage pricing will also reflect itself on storage cards, further cementing statements previously made by OEMs like Transcend and Adata , some of which are even unable to secure flash chips to begin with. The Reuters report also points out that microSD cards aren't really optional, as some titles chew up most of the Switch 2's capacity.
DRAM shortage reportedly has Morgan Stanley downgrading OEMs' stock ratings
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/video-games/nintendo/SPONSORED_LINK_URL
- https://www.tomshardware.com/video-games/nintendo/nintendo-switch-2-ram-prices-rise-41-percent-nand-flash-up-8-percent-console-giant-shares-nosedive-in-face-of-increased-cost-warnings#main
- https://www.tomshardware.com
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Informational only. No financial advice. Do your own research.