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The Wii U’s poor sales haven’t been much of a secret in the year it’s been on store shelves. But in the run up to the 2013 holiday season, Nintendo made a bold prediction that the console would manage to have sold 9 million units by March 31, 2014. Today, the company released a dismal financial report knocking that estimate down to 2.8 million, a drop of 70 percent.

Worse, Nintendo had originally projected a profit of ¥100 billion ($959.04 million)—which has now been completely reversed to an operating loss of ¥35 billion ($335.76 million), as well as a net loss of ¥25 billion instead of a ¥55 billion net profit. This is Nintendo’s third annual loss, and things aren’t looking too good.

One has to wonder whether or not it was wise for Nintendo to make such a bold prediction of success for this holiday season—the loftier the goal, the bigger the disappointment, right? At the same time, Nintendo had to express confidence in its product in order for the console to stand any chance at all. And to be fair, I really am surprised that the Wii U did quite as poorly as it did.

As our own Brian Hough speculated back in November, there were plenty of great reasons for the Wii U to win with parents buying holiday gifts in 2013. Moreover, both Shawn Farner I fully expected the Xbox One and the PlayStation 4 to stay in short supply, meaning that parents would naturally gravitate toward the less expensive Wii U as a replacement for its sold out competitors.

But we were wrong. The Xbox One sold over 3 million units in its first month on the shelves—and the PlayStation 4 did even better by moving over 4.2 million in roughly the same time frame, with only a week’s head start over Microsoft’s console. By comparison, the Wii U had only moved 3.61 million by July 2013, after having launched the previous November. It doesn’t matter how logical the choice to get a Wii U is, or how fun the first-party games might be. Simply put, the demand isn’t there, and the Wii U is not cool.

The Wii U is stuck in the middle: it’s not impressive or exciting enough to hold its own in the home console market when placed against graphics and online powerhouses PS4 and Xbox One, and it can’t compete with multifunctional tablets that have huge libraries of cheap games that kids are more likely to play at home and in the car. The Wii U’s touchscreen gimmick has potential, but if no one wants it, no one wants it.

The question going forward: does Nintendo kill the Wii U and focus on the 3DS? If it focuses on the popular handheld and its healthy library of first- and third-party software, it might be able to cut costs enough to get back into the black. I still believe that Nintendo has some of the best games in the business, and there’s immense value in keeping those franchises exclusive to first-party hardware.

But—and it pains me to say this, owning and enjoying my Wii U—it may be best for Nintendo to just drop the Wii U like it did with the much maligned Virtual Boy and start working on a new console that can actually compete. Short of a drastic move like that, I wonder whether or not the company will truly have a place in the future of the gaming market.


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