The following video is from Wednesday's installment of The Motley Fool's Weekly Tech Review, in which analysts Eric Bleeker and Jason Moser look at the biggest stories driving the tech sector this week.

This week, an analyst from Jefferies initiated coverage on Nintendo (NASDAQOTH: NTDOY ) at "buy." The analyst's buy thesis, says Eric, is that the company is going to miss upcoming earnings so badly -- thanks in large part to lagging Wii U sales -- that the company will be forced to change its strategy. Wii U has struggled out the gate as developers haven't flocked to the system -- choosing to develop for Microsoft (NASDAQ: MSFT ) and Sony's (NYSE: SNE ) consoles first. 

The analyst reasons that once Nintendo changes strategy, it'll be able to succeed in other areas such as smartphones and tablets, as well as make better use of its intellectual property. Is this a crazy buy thesis? In the video, Eric and Jason examine Nintendo's prospects.

http://www.fool.com/investing/general/2013/07/14/if-the-wii-u-fails-time-for-massive-changes-at-nin.aspx

Another summary from the Jefferies opinion

"In our view, it is highly unlikely that Nintendo will come even close to its FY3/13 forecast of ¥100b in OP. We believe that this could trigger a meaningful change. In our view, after having been seen as completely opposed to offer its games on mobile-platforms, it is not easy for the management to change its view. However, with its comments about ‚commitment‛ and about ‚responsibility‛, in our view, the management has elegantly set the stage for a change / turnaround. In a low- probability event (we assume 20%) that they can meet this year’s OP of ¥100b, the stock will likely rise and the management will get a bit longer rope. But in all probability (we assign 80%) Nintendo will miss its ‚commitment‛ by a wide margin. That will give the management an elegant way out to change direction / strategy. It will be able to say that it has tried its level best. And that it has no other choice left but to offer games on other platforms. That said, we don’t think that this acknowledgement will come before the year-end."

http://blogs.barrons.com/techtraderdaily/2013/07/08/nintendo-jefferies-starts-at-buy-massive-earnings-miss-will-prompt-change/

http://www.neogaf.com/forum/showpost.php?p=71101621&postcount=1

I wish Pachter would have said that.
The comments in this thread would have been amazing.

(btw-is it possible that motley's fool is about satire?)

Yeah, because they would totally not reallocate resources to the 3DS if the home console department would tank completely...
I'm sorry mr. not-so-clever-analyst but Nintendo is still far away from going 3rd party.

Edit:

They aren't actually serious, are they?

Not sure about the motley part, but he at least lives up to half his name!

Why does it seem that "analysts" make so much noise about what companies should do, rather than what they are actually likely to do?

This smells like FUD, and unfortunately, that has proved to be effective at chipping away a company's presence.

Doesn't make sense to me.  It is the console side where Nintendo is struggling..  They are a major player in mobile still. They should move their console business over to other consoles and pc but continue their mobile business as is without watering it down but moving content to additional mobile platforms.

It comes down to mind sets.  Often analysts want moves that spur short term gains and think companies should have same mind sets.

Nintendo would have to be humbled by poor performance of the Wii U AND the 3DS (which is not happening) for at least a generation (let's say six years) before even considering such a move.  It will not happen and would be disastorous for them to do so at this stage.

Free advice is worth nothing.

The strategy they are suggesting does not make sense. Making mobile games for phones would only hurt 3DS sales and cause them to be competing with themselves. It is really sad when the average gamer can tell you what a stupid idea it would be to compete against yourself on 2 platforms and 1 being yours but analysts who should know better are obviously not very bright at all.

Bwahaha, did he read the summary of Nintendo's Investor's meeting at all? Actually they are the biggest player in mobile games ($$$), why would they go iOS? To make less money?