STORY: Nintendo's shares fell 7% in Tokyo on Monday (May 11).
Investors sold off after the company hiked Switch 2 prices.
And as the market worries over a lack of high-profile games to build momentum.
Nintendo posted strong hardware sales for the financial year ended March.
But its outlook for this year underwhelmed the market.
The Japanese gaming giant extended the life of the original Switch with games from popular franchises like "The Legend of Zelda."
However, the console is seen as lacking potential blockbusters.
One analyst said the year-on-year fall in game shipment guidance risks signaling Nintendo lacks confidence in its pipeline.
Although they added the firm's outlook may be too pessimistic as user engagement usually picks up in the second year of a console cycle.
Nintendo also said it would raise prices of its Switch 2.
The company has an audience among casual gamers who are seen as particularly sensitive to such hikes.
Prices have gone up as electronics makers face a memory chip price surge.
Nintendo is still dependent on its core gaming business compared to its more diversified rival Sony.
The PlayStation maker saw its shares fly up 10% on Monday.
It had forecast lower sales but higher profit at its gaming business on Friday.
One analyst said Sony was in a better position than Nintendo to pass the higher costs of memory chips to consumers.
Sony also said it was planning a new joint venture to develop and manufacture image sensors in Japan with TSMC as it tries to control costs.
