Nintendo Shares Take Sharpest Fall in 2 Months

Nintendo didn't have the best day on the Tokyo Stock Exchange.

Bloomberg reports that the Japanese video game maker's shares fell the most in two months after financial services group SMBC Nikko Securities Inc. reduced its recommendation of Nintendo stock. The financial organization lowered its Nintendo share rating from "neutral" to "underperform."

They did that in part because they're now expecting Nintendo's smartphone games will not make "full contributions" to Nintendo's bottom line until the year ending March 2018. That must have spooked some investors, as Nintendo shares tumbled, closing down 7.6 percent.

That represented the biggest single-day decline since October 29.

SMBC Nikko analyst Eiji Maeda wrote in a report released this week that Nintendo's operating income for the fiscal year starting April 1 will be around 30 billion yen ($253 million), which is apparently less than half of previous estimates. This downturn is based on projected lower 3DS sales and the aforementioned smartphone revenue.

We will get a better idea of Nintendo's business performance when the company reports its latest quarterly earnings in early February.

Nintendo's first smartphone game, Miitomo, was supposed to launch in 2015. However, it was later delayed and is now due to arrive in March. 2016 also marks the year that Nintendo will begin to discuss its next console--and possibly release it if rumors prove accurate. Codenamed NX, this system is reportedly a console/mobile hybrid that runs on "industry-leading" tech.