The markets have reacted negatively to Nintendo’s efforts to rejuvenate its hardware offer.
Nintendo recently cut the price of Wii U and revealed its new 2DS handheld, but the company today suffered an 8.4 per cent drop in its share price – the biggest it has suffered since July 2011, Bloomberg reports.
Investors have been rocked by Nintendo’s omission from the Nikkei 225 Stock Average index, resulting in some stark predictions from analysts.
“The early signs of key first-party software inducing a major turnaround in Wii U console fundamentals are not promising, and the outlook for third-party support is grim,” CLSA analyst Jay Defibaugh stated. “The value of iconic Nintendo franchises may be declining as younger generations discover gaming through mobile devices.”
BNP analyst Takao Suzuki added: “We believe Nintendo’s shares have been overvalued due to speculative demand, on the assumption that they would be included in the Nikkei.”
Both have changed their buy recommendations to sell.