Nintendo Faces Tough Year After Wii U Flops

While Sony and Microsoft see strong sales for its PlayStation 4 and Xbox One, Nintendo's still trying to find traction for its Wii U, released in 2012

Wii U Flop

Sony and Microsoft may have winners with their next-generation video game consoles, the PlayStation 4 and Xbox One, but rival Nintendo can’t say the same with its Wii U. In fact, the device is pretty much a flop.

In a stunning reversal, Nintendo has slashed global sales forecasts for the console from 9 million to 2.8 million — a whopping 70% — for its fiscal year that wraps up March 31. Company also expects to report a third consecutive annual loss after failing to reach sales targets during the same frame.

Nintendo said it expects a loss of 35 billion yen ($335.76 million) this year. It originally anticipated a 100 billion yen profit. It reported an operating loss of 36.41 billion yen last year.

“We failed to reach our target for hardware sales during the year-end, when revenues are the highest,” said Nintendo’s president, Satoru Iwata, at a shareholder briefing. Gamemakers typically generate a majority of their sales during the holidays.

Iwata said the company will hold a company briefing on Jan. 30 to discuss “a new business structure” to turn around sales and “propose something that surprises our customers” after admitting Nintendo misread the games market.

“The way people use their time, their lifestyles, who they are have changed,” Iwata said. “If we stay in one place, we will become outdated.”

The disappointing sales occurred despite Nintendo slashing the price of the Wii U by $50 to $299, in September.

But Nintendo said it also expects demand for its 3DS handheld to also decline to 13.5 million from 18 million.

Nintendo has been hit hard by the attention that’s surrounded the new PS4 and Xbox One consoles, but also the growing appeal of casual games on mobile devices like smartphones and tablets.

Despite critical praise of new installments of its “Super Mario Bros.” and “Legend of Zelda” franchises, sales couldn’t help reverse a decline in sales for Nintendo during the fall.

The Wii U was introduced in 2012 and includes a tablet-like controller to play games. Since its release, Nintendo has been criticized for being slow to release enough games to warrant the purchase of the console.

Comparably, Sony said it sold 4.3 million PS4 consoles by the end of December, while Microsoft moved more than 3 million units of its Xbox One off store shelves.