Shares in Nintendo tumbled by nearly a fifth on Monday after it warned of a third straight year of operating losses, heaping pressure on the creator of "Super Mario" to abandon its policy of not licensing its software to rivals.
After the market close on Friday, the Kyoto-based company slashed its global Wii U sales forecast for the year to March 31 by almost 70 percent to 2.8 million 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. "We believe Mario on mobile is coming."
(Read more: Nintendo heads for loss as Wii U flops)
They raised their price target on Nintendo to 29,000 yen from 26,550 yen, with a 'buy' rating on expectations of a change in strategy.
Nintendo has so far refused to allow its games to be played on consoles built by competitors or on tablets or other mobile devices that are increasingly used by gamers.
At one stage, the shares fell as much as 18.5 percent. By 0104 GMT, the stock was down 11.9 percent at 12,900 yen. It was the most traded stock on the main board.
(Read more: Nintendo CEO:'We are to blame' for poor Wii U sales)