Nintendo: Are We Doing This Again? (Ticker: NTDOY)

Investor patience is being tested. Let's analyze whether that has created an opportunity.

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“We do not disclose details regarding individual components, but we can say that we are working to secure stable supplies of memory components by holding discussions from a long-term perspective with our business partners. As a result, the recent rise in memory prices did not have a significant impact on hardware profitability in the third quarter. In addition, we do not expect any significant impact in the fourth quarter. However, if this rise in component prices lasts longer than expected and runs through the next fiscal year and beyond, it may put pressure on profitability. If the situation deteriorates significantly, we will carefully assess market trends and respond.” - Shuntaro Furukawa, President, Q3 FY 2026 Conference Call

I call myself a long-term investor, willing to wait years for my thesis to play out, if necessary.

Nintendo sometimes makes me rethink the sanity of this philosophy.

Holiday-quarter sales of the Nintendo Switch 2 (SW2) were strong and exceeded initial volume guidance. Revenue is beginning to swing upwards, with Nintendo deftly transitioning from one console to another while keeping customers engaged.

And yet, the stock is now in a 45% drawdown and somehow flat over the last five years while the S&P 500 has doubled. Some of this drawdown is due to factors beyond the company’s control, such as the current narrative around memory chip prices impacting profitability. Others, self-inflicted. Would it pay them to simply tell investors (and customers) your true product roadmap? Could you actually give guidance that isn’t disingenuously sandbagged?

Wall Street – or, more generally, investors focused on near-term returns – periodically grows frustrated with Nintendo’s methodical approach and secrecy. This is especially true at a time like early 2026, when energy is spent determining whether your software holdings will go out of business tomorrow. Who cares about five-year earnings estimates when AI is going to kill every business?

An advantage we have as individual investors is being unshackled from this short-termism. And while I, too, get frustrated with Nintendo management, any astute follower of the business knows it takes a simple reading of the tea leaves to understand what’s coming.

In other words, Nintendo’s stock hasn’t been this attractive since the first year of the SW1 launch. My conviction can be reflected in my latest Portfolio Update.

Let’s dive deeper into holiday-quarter earnings and analyze where Nintendo stands in early 2026. In this piece, I will cover:

• No Wall Street handholding (holiday quarter results)

• Hardware sales, then software sales, then profits

• What about memory chips?

• Is there still an emerging moat?

• My investment decision

No Wall Street (or customer) handholding