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    Nintendo (TSE:7974) Expands Zelda Licensing With Hasbro, Is The Stock Still Undervalued?

    Simply Wall St·07/18/2026 14:18:33
    Listen to the news

    Hasbro’s new multi year licensing partnership with Nintendo (TSE:7974) around The Legend of Zelda, with products previewed at San Diego Comic Con 2026 and a 2027 rollout, is drawing fresh attention to Nintendo stock.

    See our latest analysis for Nintendo.

    Despite the Zelda licensing news lifting sentiment and a 1 day share price return of 3.02% to ¥7,294.0, Nintendo’s year to date share price return is down 31.51%, and its 1 year total shareholder return has declined 42.48%, even though the 5 year total shareholder return is 39.00%, which points to fading momentum after earlier gains.

    If you are thinking beyond Nintendo and want more ideas in gaming related hardware and content, this is a good moment to scan 33 robotics and automation stocks

    Nintendo’s intellectual property continues to look powerful, yet the share price is still down sharply over the past year despite the latest Zelda driven bounce. This raises the question of how much of that core strength is actually reflected in today’s valuation.

    Most Popular Narrative: 8.8% Undervalued

    According to the most followed narrative on Nintendo, the fair value of ¥8,001.44 sits above the last close of ¥7,294, which frames the current discount through a long term product and content lens.

    Nintendo currently holds a competitive advantage because the unit price of the switch 2 undercuts the steam deck significantly. Apparently supplier arrangements have secured the supply of LPDDR5X 12 gb modules. The absence of GTA VI on the console during the holiday poses a significant risk. Currently the switch 2 is not serving the casual audience. Casual players might not opt for a switch 2 and stay with their switch 1. The switch 2 seems to target a more dedicated audience which overlaps with it's competitors namely ps5 and xbox. PlayStation 6 launch in 2027 may pose a risk. In the handheld and hybrid division Nintendo is the Monopoly with more than 90% of the market share. Sony and Microsoft have announced price increases higher than the price increases of Nintendo which puts Nintendo at the lowest barrier of entry having not only the cheaper switch 2 but also offering the switch 1 which is the only console at a reasonable price value. The 4 Gb of ram in he switch 1 helps to keep cost low. Housholds seem to purchase multiple devices. The software lineup for 2026 is rather weak with it's only blockbuster being Ocarina of Time. New entry Tomodachi Life caters to the female audience with good sales. In 2027 however Pokemon Wind and Waves as well as some unannounced mainline titles will drive sales. Therefore sales and revenue will increase in 2027. The effects of Nintendo being significantly cheaper than it's competitors through successful supply chain management and fair value product design still has to be quantified and will crystalize during the first 2 quarters of 2027. Total installment base across switch 1 and 2 will hit 200 million devices in 2027. The movie production serves as a complementary marketing tool also leading to increased sales of software and hardware. Further research needs to be done to pinpoint the exact numbers.

    Read the complete narrative.

    Want to see how this pricing edge, console mix and content slate feed into that fair value for Nintendo? The narrative leans on specific growth, margin and profit assumptions that are not obvious from the headline numbers alone. The full story sets out how hardware pricing, software depth and installed base targets combine to back the ¥8,001.44 figure.

    Result: Fair Value of ¥8,001.44 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this Nintendo narrative could be upset if Switch 2 fails to attract casual players as expected, or if competing consoles and content gain more traction than anticipated.

    Find out about the key risks to this Nintendo narrative.

    Another View: Nintendo Through a P/E Lens

    While the most popular Nintendo narrative points to a fair value of ¥8,001.44, the current P/E of 19.8x tells a more cautious story. It is richer than the JP Entertainment industry at 15.5x, yet below both the peer average of 24.4x and the fair ratio of 24.8x.

    In practical terms, that mix suggests the stock is priced above the broader sector but below where similar companies and the fair ratio sit. This can mean less downside buffer if sentiment weakens and less obvious upside if expectations are already high. Which signal do you weigh more heavily when pricing Nintendo today?

    See what the numbers say about this price — find out in our valuation breakdown.

    TSE:7974 P/E Ratio as at Jul 2026
    TSE:7974 P/E Ratio as at Jul 2026

    Next Steps

    With sentiment around Nintendo clearly mixed, this is a moment to move quickly, review the data for yourself and weigh both sides of the story. You can start with 3 key rewards and 2 important warning signs

    Looking for more investment ideas beyond Nintendo?

    If you are serious about building a stronger portfolio, do not stop with Nintendo when there are other clear ideas you can assess with the same discipline.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.