Nintendo's stock has plummeted 45% since hitting a high last August, despite the successful Super Mario movie that could generate $1 billion at the box office. The decline stems from rising memory chip costs that have squeezed profit margins and raised questions about Nintendo's ability to sell as many Switch 2 devices as hoped.

Memory chip price increases have affected gaming companies broadly, with Nintendo potentially forced to increase the Switch 2 price by $50 to $500 in the second half of this year. Sony's shares have also fallen more than 30% since November as PS5 console costs rise, though Nintendo faces greater challenges with its price-sensitive customer base.

Switch 2 sales have shown impressive momentum, with 17.4 million units sold by December—77% faster than the original Switch in its comparable period. The console's success stems from strong exclusive titles like Pokémon Pokopia, which sold 2.2 million units in its first four days, though Nintendo remains dependent on new game releases to drive adoption.