Nintendo, the world’s largest maker of video games, fell the most in more than two years as CLSA Asia-Pacific Markets cut the stock to sell after the company wasn’t added to the Nikkei 225 Stock Average. The shares fell 8.4 percent to 10,860 yen as of the close of trade in Tokyo, the biggest drop since July 2011.
Nintendo last month cut the price of its Wii U video-game console in the U.S., ahead of new machines from Sony Corp. and Microsoft Corp., amid stalling sales and delays to new software titles. President Satoru Iwata took the helm of U.S. operations to drive growth as combined sales for its hardware totaled 1.8 million units in the quarter ended June, down from 3.1 million units a year earlier, as customers migrate to mobile devices for playing online games.
“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,” Jay Defibaugh, an analyst at CLSA in Tokyo, said in a report in which he cut the stock to sell from buy. “The value of iconic Nintendo franchises may be declining as younger generations discover gaming through mobile devices.”