News of a weak sales outlook clobbered Nintendo's stock on Thursday, as investors grew increasingly pessimistic over the gaming console maker's ability to deliver a new blockbuster product, but analysts say it might be too early to write off the company yet.
Nintendo's "core business is in bad shape and worsening," said CLSA analyst Atul Goyal in a note. The biggest worry is the decline in sales of its 3DS portable gaming console and software, which have "kept Nintendo from large losses," he said.
Nintendo halved its full year operating profit target to 20 billion yen ($169.6 million) late Wednesday, citing weak sales of its 3DS console. Analysts on average had expected 36.6 billion yen, according to Thomson Reuters data.
Shares tumbled on Thursday, down 7.32 percent at mid-day.
"[Right now] there's nothing to be done – we just have to wait and hope the next generation consoles will be blockbuster hits," said Barclays analyst Yuki Okishio.
The outlook for the Wii U, which launched in November 2012 and was supposed to be the saving grace product, is dismal.