Wright said:
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Canceling the Wii U and simply washing their hands of it is not an option. Nintendo might as well close if they're going to do that. It would destroy their business. They've invested billions into R&D for Wii U hardware and software, and as such they have a responsibility to their shareholders and to their company as a whole to see the Wii U through to the end as a full, successful, long-lived platform.
GameCube had very similar problems after it's first few months on the market. Nintendo didn't have any software ready, and sales dried up. Nevertheless, even though Nintendo knew the GameCube was not to be a huge success like the NES and SNES, or even the N64, they had to keep pumping games out for it, as it was their home console. They didn't have a choice. When you spend 2-3 years spending hundreds of millions designing hardware, you can't just throw it out when sales hit a rough patch. Not when you're one of only three video game console manufacturers in the whole world.
Had Nintendo not had N64 already waiting to be released very shortly after the Virtual Boy proved to be a bust, they would have been toast.