Nintendo shares face uphill battle with Switch seen past its peak

Nintendo Ltd. has sat out the rally in tech stocks this year and may remain stuck in the doldrums until it unveils a successor to its Switch game console, which has seen sales declining over the past two years.

Shares of the fabled creator of Mario and Zelda are up less than 2% this year while Sony Group Corp. has surged 20% with help from an improved PlayStation outlook. Microsoft Corp. has gained 7% despite a post-Covid slip in Xbox sales.

Earnings due Tuesday from Nintendo may do little to help its share price, with analysts expecting it to report a 5% drop in operating profit to 240.3 billion yen ($1.8 billion) for the quarter that ended Dec. 31. That would be its first year-on-year decline in the key holiday quarter since 2017, the year the Switch was introduced.