Nintendo budgeted a record 70 billion yen ($684 million) for research and development this year, as increasingly sophisticated graphics and functions has pushed the average cost of making a game to around 2-3 billion yen.
But with the company falling short of a 100 billion yen operating profit target set last year, Thursday's announcement is likely to focus on cost cuts.
Nintendo will report its third-quarter results on Wednesday.
"The increase in the cost of game development is one of the reasons why Nintendo hasn't put out (enough new) software," said Hideki Yasuda, an analyst at Ace Securities.
Nintendo has already moved to reduce costs by merging its portable and home game console departments last year.
(Read more: Resisting mobile hurts Nintendo's bottom line)
Some investors doubt the move will be drastic enough, with some clamouring for Nintendo to license its games out to other companies and to make a mobile version for Apple's iOS and Google Inc's Android smartphone platforms.
But the robust sales of the Playstation 4 and Xbox One suggests the threat of smartphones to home game consoles has been overplayed, while Nintendo has long resisted going mobile, saying it would hurt the inherent value of its characters.
Instead, Nintendo could better exploit that value by expanding its franchises for characters such as Mario and Zelda as it did with Pokemon, which was spun into a successful cartoon series, movie and toys and is now owned by an affiliate.
"They could diversify their revenue streams... rather than licensing Mario to another game company it would be better to make a movie or a TV series," said Yasuda of Ace Securities. "Bandai Namco has found great success doing that with Gundam and Kamen Rider."