Forget the tingle tuner..... how about Pac Man vs that still gets a play here when friends are over

I think the worry lies in two main problems right now;

1: Nintendo are set up to fail their fiscal projection by a fairly large amount, likely somewhere between 22-30% at this rate, this indicates that they have misread the market. Their projection was already fairly conservative to begin with, as have all their projections since late 2010 been (they mostly turned out right though).

2: Selling hardware at a loss. Nintendo categorically refuse to state exactly how much they're losing on every piece of hardware, they gave a reasoning along the line of "hardware loss is offset by selling two pieces of software". This loss means that they have little to no wiggle room for reducing the price to drive sales towards meeting the projections and past. The fact that they release a product with a significant loss, which is not something Nintendo does historically, all the problems with the OS and updates, lack of features from launch and somewhat inflexible solutions to things such as battery life on the gamepad, storage capacity and the reportedly horrid loading times for almost everything you do in the OS and with features show a distressed Nintendo that people don't recognize.

All this does point towards a Nintendo that is stressed, having been forced to launch first despite all the bravado from 2008 and 2009, they are facing the mobile/tablet market against their handhelds globally, they have launched  a console with unusual problems that is being sold at a significant loss and their release slate is uncertain at best and meager at worst.

There are those who predicted that this exact thing would happen due to the Wii U aiming for two markets at once and the rise of the tablet and social game. Seeing it progress like this makes it likely that those were right, in the big picture Nintendo is in a very dire position unless trends change fairly soon (which I could elaborate at a later time if you'd like). Are the Wii U sales disastrous? No, no they're not. Could they be a prelude to a disaster? Yes, yes they can and its fairly plain to see. Nintendo are losing money (and have been for some time) basically for the first time since they started up decades ago.

Not bad :) You are right though, there will be revisions. Wii U hardware and software will be revised to 4.5 million shipped and 16 million respectively, 3DS hardware and software will be adjusted down as well (Monster Hunter not coming out in Q4 doesn't help), Wii and DS software are going to be revised upwards.

In the end, Nintendo will posts profits, partially due however to exchange gains nonetheless. Iwata is a smart man, he turned around the 3DS in less than a year and that business will drive Nintendo forward to profitability much like the GBA did during the Gamecube era. He smartly cut marketing costs by half by introducing Nintendo Direct and creating the Miiverse platform is another way to ensure that consumers stay active. I think Nintendo's next move is to unveil the next Nintendo Direct with release dates to their early 2013 games like Lego City, Wii Fit U, downloadable and so on. Nintendo might not have done much marketing as they knew the Nintendo faithfuls would buy their products first regardless. Hence, I believe now Nintendo will start the marketing aspects and place their bets with Lego City Undercover in tie with Lego and Wii Fit U. Hopefully, our investments will pay off.

They never said that. Nintendo is a very conservative business. I believe Reggie was right when he said that all it takes is one game for their equation to be profitable. However, he mistakingly did not take into consideration the investments Nintendo made in R & D and marketing. When one takes that into account, it could point towards 2 games. 

On a side note, the Gamecube when launched was sold at a loss of 9$ per unit. This is not the first time.

This intrigues me. I'm looking forward to Iwata (hopefully) mentioning this at Nintendo's investors meeting in two weeks.  Since Nintendo no longer announces games or game details at these things (since Nintendo Directs began), it should leave more than enough time to delve into what kind of changes are occuring within the organizational structure of the internal teams.

We already know Miyamoto has moved himself away from overseeing major EAD projects and instead is finishing up Pikmin 3 with his hand-picked team and then moving onto smaller games with newer staff that need supervision.  I believe Takashi Tezuka is taking over as head of EAD development.  He's got an impressive list of games on his resume, I look forward to E3 and seeing what kind of output the teams are making under his leadership.  There'll no doubt be some subtle changes.

Not the first time, no, still not something Nintendo is known for (in fact; I believe this is the second time it has ever happened) and the loss appears to be a lot bigger this time around, mostly due to manufacturing costs of the gamepad. The Gamecube also got some pretty good hardware for the price and was actually more powerful than the PS2, unlike the Wii U, which is likely to have weaker specs than both the PS4 and 720 for roughly the same launch price. Its all about the gamepad, I think it might have been a very bad decision to let so much ride on the gamepad becoming popular. The Gamecube also became profitable very quickly and the price was cut all the time, making it the cheapest alternative throughout the entire generation.

Reggie's statement was revised from one piece of software to two pieces. If one of the biggest spokesmen for the company mistakenly leaves out marketing and R&D from the equation, well then that's his mistake and not mine. It changes nothing since the official word is still two pieces of software to offset the hardware loss.

Lack of marketing, selling at a loss, dire 3rd party situation and a product that appears to have lost the casual customers to tablets and phone games and the core to other maufacturers, at least for now. This is not the continuation of the Wii brand that most people would have dared suggest only a couple of years back. I'm not spelling doom, I'm simply stating that things could have been a whole lot better overall for Nintendo right now.

Yeah, I think, or at least hope, the realignment isn't just for simple cost savings but anchors a longer term plan that affects gaming. Iwata if anything has been honest in the past, quickly took a 50% paycut, apologized, so I really don't expect him to do a PR spin on the state of Wii U.  So I hope Nintendo's been working hard at putting together a respectable 2013 line up for the Wii U. 

Very good post. I wholeheartedly agree with what you said in it, too.

Nintendo can bring the Wii U back up in terms of sales, they just need to push it well enough.

hope it works out for the best. reaction to WiiU sales.

In regards to profits, I think what's going on right now is that the 3DS side of their business is profitable, and becoming more profitable as time goes on, since hardware no longer sells at a loss, software is picking up, and the system seems to be gaining popularity, as it's yet to hit it's peak year (likely this year).  So Nintendo can afford to sell Wii U at a slight loss (I assume it's much closer to GameCube's initial loss than 3DS's after the markdown in 2011) in order to help sales, so 3DS can carry the load for a year or so while Wii U manufacturing costs come down and they break even, and then eventually become profitable on both systems, which is when they'll be back to making bank again until the next cycle five years from now.