License games to rivals, analysts urge Nintendo

Console pioneer sees 20% stock dive on slashed Wii U projections

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License games to rivals, analysts urge Nintendo Nintendo announced a 70% downward adjustment in its Wii U sales forecast to just 2.8m units. (Getty Images)
By  Stephen McBride Published  January 20, 2014

Analysts have today urged Nintendo Co to break from its policy of not licensing its software to rival platforms, after the gaming giant's shares plummeted by almost one fifth following news of continued operating losses.

According to a report from Reuters, Kyoto-based Nintendo waited until markets closed on Friday to share news of revised first-quarter projections for global sales of its flagship games console, the Wii U. The company's announcement revealed a 70% downward adjustment in the forecast to just 2.8m units.

"Its console-based business model spells doom for stakeholders. It has no choice but to accept the change," Jefferies analysts wrote in a note.

Nintendo has not only resisted licensing its games to rival consoles. Mobile platforms have created a growing and lucrative market for casual gamers that the Mario franchise creator has yet to tap significantly.

"We believe Mario on mobile is coming," said the analysts.

Nintendo stock has shed more than 80% of its value since November 2007, when it hit a peak of 73,200 yen on the back of success from the Wii. But its successor, the Wii U, has failed to make waves and Nintendo is relying on it to compete against Microsoft's XBox One and Sony Corp's PlayStation 4, both of which showed strong launches in November.

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