It`s not bad ... it`s just disappointing. And low shipments, as others have stated, might be due to overshipping in the last qurater due to higher projections then.

Nintendo did give the market a chance.... it's been out for a year and a half now. How much longer does it need? The market rejected it and Nintendo is aware of that. Hence, their god awful low sales projection. Not only that but retailers won't let themselves be used as a warehouse stocking the console for months before it moves. Retailers keep track how long they hold on to things before they sell and if a product isnt moving and similar products are then retail wont be too worried about cutting out space (and pushing it to the least visited area) of the store. It's already happening with the Wii U.

Hopefully Nintendo can turn it around.

Point is you can't just throw something together and put it on the market. That's the kind of crap that led to the Virtual Boy and the Sega Saturn. Let's say it sets in at Nintendo around the end of 2013 that they won't be able to hold onto Wii U for 5 years. Even an accelerated R&D cycle is going to take 2.5 years from that point to put something workable on the market.

Though, yes, there is the counterexample of the DS coming 3 years after the GBA, but that half proves the point. DS's anemic first year showed that it was about a year too soon to market.

In this situation it`s very difficult to post profits in the near future. You`re either losing money on your current product or spending massive sums of money on R&D for a new console. 

Hype for a new console too early isn`t going to work if people have no faith in the company that makes the product. The relatively small (in comparison to the market as a whole) but vocal Sony fanbase was influential to the successful launch of the PS4. You`re grossly overestimating how much they have to gain if they plan to release a rushed product that people think will be bad and no one will care about anyway. 

DS was an exception. It had to happen to Sony`s imminent entry into the handheld market. The GBA would have been toast next to the new and much more poweful PSP and the wanted to maintain their low retail prices, so they launch a new handheld with a unique design.

The thing is that, as ridiculous as it is, the only original AAA title that was released was Super Mario 3D World. Mario Kart 8 and Super Smash Bros. will increase demand, even if by no titanic amount.

And ``not making a profit`` is very different from being a ``dismal failure``. It`s only a dismal failure in comparison to previous products. Something must only necessarily be discontinued if it`s truly dead weight, not if it`s underperforming.

When your business centers around one or two products, rushing to discontinue and replace a product can be more damaging than helpful. I know that Sega`s situation may have been somewhat different, but the poitnt of the argument makes sense: You can`t just sweep a failure under the rug and say ``OK guys, we f***ed up, now come and buy our new product!``. A lot of people will at least take a wait-and-see approach rather than being fooled twice, during which time they might lose interest altogether. Established core markets aren`t that forgiving. It makes much more sense to ride it out a bit and build consumer trust, while not waiting too long to can it. 

If it helps, we still are

Cram two consoles full of crap no one wants and see what happens...

Are you saying that no one wanted the Wii/DS as well?  The majority of "crap" (I guess you mean games) released for the Wii U/3DS are games that were successful on the Wii/DS.

Guess again