Nintendo¡¯s shares fell the most in almost a month, hurt by fears that rerouted shipments in the wake of U.S.-Israeli strikes on Iran may drive up logistics costs for Europe-bound Switch 2 consoles.
The world¡¯s largest container carriers are rerouting services away from the Suez Canal and sending vessels around the southern tip of Africa, after Houthi militants threatened to restart attacks on cargo ships in the Red Sea with ties to the U.S. and Israel. The move is estimated to add more than 10 days to deliveries.
Nintendo relies heavily on sea freight to transport its $450 console from assembly hubs in Asia. Its shares fell as much as 4.7% in Tokyo on Monday, underperforming the benchmark TOPIX¡¯s decline. Shares of Sony, which also ships its PlayStation 5 consoles by sea, fell as much as 3%.
¡°As investors assess the broader impact of the Iran situation on the technology sector, game consoles will draw scrutiny because managing shipping costs are critical, given the thin profit margins on hardware,¡± said Toyo Securities analyst Hideki Yasuda.
The prospect of higher freight costs adds to the challenges facing the Kyoto-based company, which is already contending with tariffs on U.S.-bound Switch 2 units and losses on a Japan-only budget model sold at below cost. The Middle East has been an expanding market for game consoles, and prolonged disruption could slow that growth while weighing on near-term sales for hardware makers.
Plans by Nintendo¡¯s shareholders to sell as much as ?285.7 billion ($1.9 billion) worth of stakes in the company also weighed on the stock. Nintendo plans to repurchase as much as ?100 billion of stock to cushion the impact.
Affiliate Pokemon on Friday said Pokemon Winds and Pokemon Waves ¡ª the next mainline installments in its blockbuster franchise ¡ª will be released in 2027, which was later than anticipated. Pokemon titles have historically helped drive Nintendo platform momentum, and a holiday-season release had been expected to boost otherwise lackluster software sales for the Switch 2.
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