Nintendo stocks fall over 7% as new Direct fails to impress investors

Nintendo shares have dropped nearly 7% after the most recent Direct show as investors express their disappointment with the event.

3

Following the outperformance of the original Switch, shareholders are expecting big things from Nintendo. But the company has carefully informed investors about the Switch 2 generation's myriad of problems, including rising costs eating into profits. One thing that hasn't changed, though, is Nintendo's conservativism around software, which sees the group carefully scheduling and spacing out its games across multiple years.

Right now, investors believe the Switch 2's pipeline is missing something big for this fiscal year--a new 3D Mario game. The latest Nintendo Direct apparently disappointed shareholders because it didn't include more new Switch 2 games, leading to a reduction in share demand and causing stock prices to drop more than 7.4% in next-day trading (currently at 7,215JPY, -6.76%). Nintendo only revealed two new first-party Switch 2 game at the show, and neither was a Mario game.

3

However, investors that have kept with the headlines may not have been surprised by the lack of a 3D Mario game. Nintendo's show comes months after reports that the next mainline Mario game isn't coming in 2026, and will instead release next year in 2027. That's despite Nintendo continuing Mario's 40th anniversary celebrations into this year.

It's possible that Nintendo didn't reveal a new Mario game because 2026 is also the 40th anniversary of one of its other core franchises, The Legend of Zelda, and Nintendo plans to release a remake of the Nintendo 64 original Ocarina of Time on the Switch 2 to commemorate four decades of the franchise.

Announcing a new Mario game at this time could take away from the thunder of the Zelda announcement, and it looks like the Ocarina of Time remake is positioned as Nintendo's big Holiday 2026 release.

It's also possible that Nintendo's Holiday software presence could be dialed back in an effort to not compete with Grand Theft Auto VI, which is expected to essentially eat up the collective games industry's time and money for months on end.

Nintendo has telegraphed that it expects to sell 16.5 million Switch 2's in Fiscal Year 2027, and a steady slate of new content--including a galaxy of re-releases, remasters, and ports--will be key to moving these units.