I think the high forecasts were to show that they believe in their products.

They don't adapt well to change, be it in game market or in their sales.

They have become incompetent as far as consoles and with the exception of the waggle fad, they are on a decades long downward spiral into irrelevance. And flat out refuse to do something new to change it while plodding along with the same games. Id love a FPS or Sim like racer from Ninty, but they think making yet another Mario is the right thing.

Their high forecasts are part arrogance and part ignorance, they refuse to see reality.

I think they got over confident because they thought the same as the Nintendo Fanboys; that the Wii was successful because it was a good Nintendo console.

They just don't seem to get how the market is evolving.

I think Nintendo expected MH 4, Pokémon and 2DS to do more for the handheld business. It`s a honest expectation.
Personally, i think the PS4 and XB1 hold them back.

As far as Wii U goes, sales are the result of mainly 2 flaws:
- Coming unprepared for the generation;
- Bad/confusing showcase of Wii U right from the beginning (something that took basically a year to really start adressing).

While not a key argument, half of the fault in the third party situation lies with Nintendo, from lack of communication, to building a piece of hardware that is simply not as simple to work with as the X360 was (still is) or the PS4 currently is, systems undoubtedly loved by third parties.

The games statement is correct - it indeed is what sells systems. But Nintendo has been so far unsuccessful with pushing massive numbers using their own software like they did with the Wii. I suppose they really overestimated SMB3DW. The Wii proves that a system doesn't necessarily need massive third party support to sell systems, but Nintendo also put too much trust in their own software... manifesting in an inability to read your market. Back in the Wii days nobody would even bring up the third party point in a Wii sales discussion.

I'm on my phone and can't quote but could people please stop to confuse the market cap with the actual worth of a company or let alone the size. Imagine Sony would buy all of their stocks back. That would bring the market cap to exactly 0 $. Would that mean that they're dead?

Changing markets, hype killed by PS4/X1.

Not sure why 3DS didn't meet target, maybe smart phones taking a small slice.

Nintendo made a big mistake this generation by building a console that has no defined audience. When they built the Wii, they had a goal, a strategy. Do not go after the same market as the Xbox 360 and PS3. Expand gaming to people who had never experienced gaming before. How did they do this? By removing one of the biggest, most intimidating, obstacles. All those buttons. Motion controls are what brought in the masses. Add to that a weird new name that everyone talked about, and instant publicity and name recognition.
For this go around, Nintendo could not decide what to do. The first, and biggest mistake was the name. I am willing to bet that most casual gamers do not even realize there is a new Nintendo console on the market. Since Nintendo put the word Wii in front of everything last generation, Wii U does not sound like a new console. It sounds like an add on. For those casuals that discover that Wii U is a new console, they find out that it now requires a new tablet like controller (only controller on the box) that is confusing and not at all like the Wii remote they loved. What happened to those easy, fun, motion controls? To keep the casual audience, they should have named it Super Wii, and made the tablet an add on to be purchased separately, thus keeping the price point low and appealing.
If Nintendo wanted to go head to head with the Xbox and PS brands, they would have needed specs that were greatly enhanced, because that audience is all about the numbers, but more than that, they would have needed to give Xbox/PS gamers a reason to switch to Nintendo. Simply matching, or slightly exceeding, the specs of the competition would not be enough. What would have done it? I would like to hear your ideas.

I think simply Nintendo knew the quality of Super Mario 3D World and thought this one stellar game (and it is) will be enough to have a ton of casual/family gamers finally upgrading their Wii to Wii U

They also released Wii Sports Club (awful rehash of past gimmick) and Wii Fit U (awful rehash of past gimmick) expecting each of those to have audience willing to spend $300+ for the privilege of playing shallow ports of shallow games.

Problem with Nintendo is they take too long to make relatively shallow games and expect those games to shine and perform well in market place that has gotten accustomed to much better gaming experiences on competing hardwares.

They are positioned as 2nd or 3rd console and they released early, and people have barely begun with PS4 and XBO so they are not looking for that 2nd or 3rd "next-gen??? console"

The Nintendo "core" are just not large enough to sustain Nintendo... plus they are mostly content playing on 3DS.