The reality of the Wii U's situation would seem to be setting in for Nintendo. The company has made huge cuts to its sales forecast for the business year. It has cut its predictions for the Wii U by nearly 70%, down to 2.8 million units from 9 million. The forecast for the 3DS isn't much better and has been reduced from 18 million to 13.5 million.
The picture isn't much better for software, either. Projections for the Wii U have been halved, from 38 million down to 19 million, while the forecast for 3DS software sales is down from 80 million to 66 million.
The upshot of this is that the forecast for net sales has been driven down over a third overall, from 920 billion yen to 590 billion yen. In turn, that means that rather than an operating income of 100 billion yen ($958.2m) it expects to make a 35 billion yen ($335.4m) loss.
Addressing the shortfall for the 3DS, Nintendo president Satoru Iwata explained that, "outside Japan, while its market share increased as we continued to release compelling titles throughout the year, Nintendo 3DS did not reach our sales targets in the overseas markets, and we were ultimately unable to achieve our goal of providing a massive sales boost to Nintendo 3DS in the year-end sales season. Using the U.S. market as an example, Nintendo 3DS became the top-selling platform in the last calendar year, according to NPD, an independent market research company, with its cumulative sales exceeding 11.5 million units; however, the estimated annual sales of the Nintendo 3DS hardware remain significantly lower than our initial forecast at the beginning of the fiscal year. In Europe, while the individual markets showed different results, France was the only market in which we experienced relatively strong sales, and we failed to attain our initial sales levels by a large margin in other countries.
Addressing his company's home console, Iwata went on, "Wii U sales, on the other hand, showed some progress in the year-end sales season as we released various compelling titles from the summer onwards, launched hardware bundles at affordable price points and also performed a markdown of the hardware in the U.S. and European markets; however, they fell short of our targeted recovery by a large margin.
"In particular, sales in the U.S. and European markets in which we entered the year-end sales season with a hardware markdown were significantly lower than our original forecasts, with both hardware and software sales experiencing a huge gap from their targets. In addition, we did not assume at the beginning of the fiscal year that we would perform a markdown for the Wii U hardware in the U.S. and European markets. This was also one of the reasons for lower sales and profit estimates."