This week, Nintendo reported an operating loss for the third fiscal year as Wii U sales dropped by 20% from a year ago. Nintendo sold just 310,000 Wii U consoles in the March 31 quarter. The company also missed 3DS sales targets. Company president Satoru Iwata declared that the losses are "unacceptable," and vowed to regain "Nintendo-like" profits, yet it's still unclear at best if the Nintendo can really do anything to reverse the declines.
The root cause of the problem is so fundamental that it would be difficult to address. When the Wii U first launched in 2012, it lacked some of the features that are considered standard on consoles. For instance, it couldn't play DVDs, which the competing consoles could. It was also beneath all the other competing consoles in processing power. There was a lot of excitement surrounding the Wii U based on the controller, but many still viewed it as an incomplete system, because it lacked a lot of the features necessary to compete.
These core issues precipitated into a festering problem that resulted in a loss of support from third-party developers that continues today. Bethesda is among the developers that recently said that it has no plans to develop anymore games for the Wii U, another dent to the Wii U's library of launch titles.
"It's a snowball effect," said Mintel analyst Bryant Harland. "Being behind in hardware doesn't just affect the consumer audience. It also impacts third-party developers and their support for the console. If gamers don't actually have content to play, then it's going to be a problem. It's kind of a big deal."