Nintendo has slahed its sales predictions for the Wii U, saying it now expects to sell 27 percent fewer than it previously did.
It's now forecasting sales of just four million units in the 12 months ending March 2013, despite the fact that it's making a loss on every one. Sales during the holiday period were poorer than expected.
The company's also cut forecasts for its other consoles. 3DS sakles are now likely to be 15 million by March - 14 percent fewer than predicted - with DS sales down eight percent on ther forecast at 2.3 million.
"While Nintendo saw year-on-year increases in the sales of Nintendo 3DS hardware (up 11 percent year on year) and software (up 41 percent year on year), those gains were not enough to offset decreased sales of Wii and Nintendo DS hardware and software," says the company.
"Furthermore, the strength of the yen averaged against the euro in the first nine months of Nintendo's fiscal year contributed to an overall 2.4 percent year-on-year decrease in sales."
Depite this, the company's upped its annual net profit forecast to 14bn yen, or around $154 million, compared with a loss of 43 billion yen last year. This improvement, though, comes thanks to gains from the weaker yen, which both increase the value of its foreign currency assets and make Nintendo's prices more competitive with foreign firms.
Nintendo is also predicting an overall operating loss of 20 billion yen for the year, rather than the 20 billion profit it previously forecast.
To turn things around, the company may have to cut the price of the Wii U, particularly if, as expected, it faces competition from new PlayStation and Xbox models later this year. It may also have to do more to attract popular games developers.