Who would replace him, though? A recent GAF thread discussed that the board of directors is almost entirely stacked with people favorable to Iwata (there is one person alone who may have differing opinions, possibly). Unless Yamauchi's shares go to Arakawa and Arakawa himself decides to seize control, a leadership shakeup would make no difference in terms of direction. It's like all the Americans yelling "impeach Obama" when what that would get them... is President Joe Biden.

Aside from the fact that Nintendo's doing what they can with the Wii U. It is not a poor product, but it has been poorly executed so far, and some of those factors (third party flight) being ultimately out of Nintendo's hands, they're doing what they can: cut price and bundle winning software and wait for more good software to come. Not sure what the anti-Wii U crowd wants, here (cutting the Wii U short and replacing it quickly is the recipe to kill Nintendo's reputation altogether, as not standing by their hardware is really what killed Sega, the lack of confidence from the CD, 32X, and Saturn).

We also forget when Sony was losing money hand over fist with the PS3 (and they were selling more units at the time), and managed to turn it around. Granted, because they had the third parties all running interference for them, but surely Nintendo could manage a somewhat similar turnaround.

People change. Their ideas and motivation change. It doesn't matter what they did in the past, it's about the here and now. Maybe they were right for that time.

I like Iwata as he seems a nice person - I mean, how may CEOs will take a pay cut so people get to keep their jobs - but business is like war and right now this general is losing his men fast.

It's more like a team owner that left the stadium to rot. While people don't dislike the team, they don't want to set a foot in that junkyard of a stadium in order to see the team play.

I am pretty sure that if Nintendo accompanied SM3DW with Metroid, F-Zero and Star Fox, you would call it an amazing lineup that is guaranteed to kickstart the Wii U.

I'm doubtful any one will be reprimanded, demoted, punished or outright fired. When's the last time any one at Nintendo was let go for flops and bad business decisions? To go from making hands over fist money with the Wii, breaking records and the like, to now losing money and having a stinker on their hands with the Wii U, someone should be looking at a shake up within the company.

The investor Q&A should be very interesting. 

The landscape in elecontrics entertainment 6-7 years ago when Nintendo was pioneering the blue ocean strategy was radically different too. There was no iPhone or any real entertainment-centric smartphones. There were mainstream tablets. Sony/MS were completely focused on chasing the hardcore gamer. 

Nintendo had a wide open avenue for success by targeting more casuals with a different approach. 

Things are just far more difficult today. 

In Nintendo's case, it's basically the same crew that also brought us the GameCube. Which means that they are people who could correctly analyze problems and come up with a solution. Of course it's damning that they fell into the trap to pick things up where the GC left off, but if they could accept the GC as a failure that made change necessary, there are realistic chances that they will accept the Wii U as a failure and change course for the ninth generation.

I meant to make that point as well. What's important is that they correctly identified why the GameCube did poorly and rectified it, but then threw out a product that tried to do everything instead of doing what they do well after that.

Nintendo needs a product that can do everything - to some extent - if they want to expand their business.  The primary reason Wii did not have as long a life span as PS360 is the lack of technical grunt (HD) and 3rd party support.  They made a system that is significantly closer to their competitors than Wii was, while still offering a new and different experience.  Wii had the TV remote-like Wii Remote.  Wii U has the Smartphone-like Gamepad, both were designed to appeal to those not used to a dual analogue controller.  And I think both are a good idea and similar even if many can't see it.  They just haven't done a good idea of marketing it, or of making a game or two that captures the imagination of new and old gamers the way that Wii Sports and Zelda TP did.

From Iwata's comments it sounds like they are giving the Wii U up until the end of this fiscal year, if it doesn't perform, radical changes are going to be coming.

Perhaps they are prepping an exit strategy or more drastic measures like indeed a tablet-less SKU.

I am not sure how Iwata can keep saying the 9 million target for the Wii U's fiscal year with a straight face still though.