The videogames market is nothing like the phone market. Any dumbster with money buys a phone to look good.
Consoles are entertainment devices. Its a much tougher market.

You mean basically anyone who lives in the 21st century who has any semblance of a social or business life? 

"to look good" is the part you missed. You dont need an expensive phone to look good and be sociable, but apple was smart in making you think you do.

Apple was smart in making a phone that could browse the internet easily and was incredibly user friendly and brings a host of social networking and entertainment functionality to a person on the go whereas before basically most people could do on the road was text in black & white and maybe check their email. 

Smart devices changed the world. 

You're oversimplifying in a number of ways here. They're not banking on quality of life to "save" them, they're just doing it to diversify, to tap into a market that they got lots of money from, but a market that they believe has diverged too far from their core business to be able to reach within their existing and planned future product lines. Neither is their financial situation so dire, largely because they just need to make the Wii U itself profitable, and everything else falls into line (wouldn't be pretty compared to where they were 5 years ago, but it would be in the black, and that's all you really *need* at the end of the day, even if investors hate stagnation)

Again, its a completely different market. Its easier to sell a phone than it is to sell a console.

Things wouldn't be as bad if the 3DS isn't looking like it's going to suffer a decline. Honestly the Wii U is maybe the lesser of their two problems here ... because they have shown they can tread water with a low selling console as long as they have a handheld that's moving 15-18 million units a year like the GBA was from 2001-2004 ... the problem is the 3DS looks like it peaked at 13 million and is declining from that. 

I also think smartphones and tablets being such a magnet for young kids is frustrating Nintendo to no end. At least in that market (the battle for young kids) Nintendo I think has finally met its equal/superior. Every time I go to a Best Buy, there's always like 3-5 kids swarming around the iPad section. 

That's kinda where I see parralels ... Blackberry's always had a nice nest egg of cash too, the problem is a cash nest egg doesn't do much when your product lines are all declining in market appeal. 

They did post a profit. An Operating loss is an operating loss, but NIntendo makes net profits. Get it straight people.

No they are not going to post a net profit this year. You are thinking of last year where they did post an operating loss, but ended up with a tiny net profit because a favorable yen/dollar turn for them. 

But its been 3 years of operating losses for them, and I don't see much changing for this coming year. It very likely will be 4 straight years of losses. 

Profitability in decline means you live to fight another day, though. Nintendo games are generally lightweight enough that they don't demand an 8-digit sellthrough for titles like many top-tier third party games, and if you're not employing a loss-leading model, then just selling the devices is more or less okay.

Declinism is bad for stocks and investor confidence and needs to be addressed, to be sure, but Nintendo's not in the position where they're forced to lose money, unless they feel they do need the Wii U to sell more at the definite cost of getting it profitable per-unit, and that is certainly attainable. It wasn't about the volume of GBA sales, but the fact that GBA and GameCube were both turning a per-unit profit, so everything sold was money in the bank even if it was inconsequential compared to the business Sony was doing at the time.

(the real disaster of that generation, that nobody ever mentions, is the Xbox, where Microsoft's per-unit losses got *worse* as the generation proceeded, not better. Microsoft really shat out a lot of money basically just to build a bridge for the 360)