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Not Fun and Games: Weak Wii U Sales Leads Nintendo to Lower Forecast Japanese gaming company expects to see an operating loss at the end of fiscal year.

By Stephen J. Bronner

entrepreneur daily

Business isn't all fun and games at Japan's Nintendo Co. The creator of such classic games as Super Mario Bros. and The Legend of Zelda is reporting an operating loss of about $335.7 million for its fiscal year ending in March. That's down from its initial expectation of a $959 million profit.

The culprit: disappointing holiday sales of its struggling Wii U system. Nintendo lowered its sales forecast of the Wii U console to 2.8 million units, down from a projected 9 million units.

Industry experts said that the wide group of consumers who made the original Wii console a smash hit are not aware that the Wii U is a new system. The console also suffers from a lack of software even after being on the market for over a year.

The Wii console was first released in the U.S. in November 2012.

Related: GameStop Shares Plummet on Weak Outlook

Nintendo faces an uphill battle in the coming year, with fierce competition from the newly-released Sony Playstation 4 and Microsoft Xbox One systems, which both saw high sales during the holidays and are technologically superior.

Nintendo President Satoru Iwata said in a statement that a price drop on the Wii successor in the U.S. and Europe failed to help the company reach its original forecasts.

The bright spot for the game maker continues to be its portable 3DS system, which was the top-selling console in the U.S in 2013 with more than 11.5 million units sold. Still, Nintendo lowered sales prediction of the handheld from 18 million units to 13.5.

Related: Microsoft and Sony Battle for Gaming Supremacy This Holiday Season

Stephen J. Bronner

Entrepreneur Staff

News Director

Stephen J. Bronner writes mostly about packaged foods. His weekly column is The Digest. He is very much on top of his email.

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