Nintendo shares plunge after profit warning

Nintendo shares fell nearly 10 percent on Monday after the Japanese gaming giant warned of lower profits and said it would hike the price of its Switch 2 console.

The company said Friday it expected net profit to plunge 27 percent in the current financial year, with analysts pointing to a lacklustre line-up of new games.

Soaring prices for memory chips fuelled by the artificial intelligence boom have also hit makers of game consoles and other devices, while disruptions linked to the Iran war have exacerbated supply problems.

In early trade in Tokyo on Monday, Nintendo shares dropped as much as 9.9 percent to 6,908 yen.

Nintendo said Friday that the Switch 2 price in Japan will rise 20 percent from May 25, and from September 1 by 11 percent in the United States to $499.99 and in Europe by six percent to 499.99 euros.

The firm's net profit surged 52 percent to 424 billion yen last year on annual sales of 2.31 trillion yen, nearly doubling from the previous year.

By the end of March, the company had sold 19.86 million units of its new console, thanks to games like "Pokemon Pokopia", "Mario Kart World" and "Donkey Kong Bananza".

But gaming industry consultant Serkan Toto told AFP ahead of the results that Nintendo is in a difficult position as Switch 2 customers are "especially price sensitive".

"The first year game lineup for Switch 2 is much weaker than for its predecessor," he said.

"But now it's time for them to really step on the gas on the software side."