Nintendo's earnings have slumped, its shares are sliding and investors doubt if the company's mobile strategy will reap rewards.

But where others see turmoil, Kazunori Ito has spotted opportunities.



Ito, senior equity analyst at Tokyo-based Ibbotson Associates Japan, told CNBC's "Squawk Box" that Nintendo is undergoing a transition and the combination of a strong intellectual property (IP) library and a recovery in the console business should bolster earnings.



"As Nintendo's profits recover from solid sales of the Nintendo Switch, I think the market would notice that this fiscal year is just a transition period as Nintendo's strength - its IP - hasn't changed," said Ito.



But investors on the Tokyo stock market were not convinced on Wednesday as Nintendo shares dropped 3.68 percent to 22,270 yen ($197.02) in late-morning trade after the company reported earnings. Ito estimates the Nintendo shares' fair price value at 30,000 yen.



Operating income for the nine months through December 2016 fell 38.1 percent to 26.3 billion yen ($232.2 million), and the game maker reduced its operating income forecast from 30 billion yen to 20 billion for the full fiscal year; commentators said the market was expecting a figure between 40 billion yen and 45 billion yen.



This calendar year looks set to be a busy one for Nintendo: The company is about a month away from launching their next-generation gaming console, Switch, which offers both conventional and mobile gameplays. At a January presentation event in Tokyo, Nintendo announced it was partnering with over 50 companies to develop as many as 80 games for the console, including third party hits such as Bethesda's Skyrim and EA Sports' FIFA.



"Nintendo is learning from their failure from the Wii U and is trying to attract third party developers ... so that more software makers are going to come onto Nintendo's ecosystem," said Ito, alluding to Nintendo's relatively unsuccessful Wii U console.