Where did it all go wrong for Nintendo?

The Wii U is languishing in warehouses, and that's not good news for Nintendo

Nintendo Wii U

Cast your mind back to November 2006, when Nintendo unleashed the Wii to an unsuspecting public. Through a combination of word-of-mouth and a clever ad campaign, within a month the Wii had become so popular with gamers and non-gamers alike it was night-on impossible to find one in the shops.

Now, just over six years later, Nintendo is in a notably less enviable position despite the recent release of its new console, the Wii U.

Yesterday's news that Nintendo had changed its projection for the current financial year from a £140m operating profit to a £140m loss was a sombre indication that things aren't going as swimmingly for Nintendo as it would like.

It would be lovely to identify one specific reason for this recent change in fortune for Nintendo, but in reality it's down to a number of factors that have all come together at an inconvenient time.

Difficult year

This was always going to be a difficult financial year for Nintendo because it's a transitional year between consoles. With the Wii essentially dead before the financial year even began and little more than a small handful of first-party titles released on it in the past 12 months, more than half of Nintendo's year was spent trying to keep a flatlining system afloat long enough to release its successor, the Wii U.

It's easy to imagine that Nintendo had already prepared for this by releasing the 3DS, its newest handheld, the year prior in the hope that sales would soar a year into its life (as was the case with the DS) and make up for both the lack of decent income from the Wii and losses from the development and production of the Wii U.

Ultimately, though, the 3DS took a little longer than expected to build up momentum and while it's now a large success in some parts of the world - indeed, it's now massive in Japan, often outselling rival Sony's PlayStation Vita countless times over on a weekly basis - there was still a large period during this financial year where the typical "where are the games?" concerns were being aired among gamers.

Worries for Wii U

And then there's the Wii U itself. It was always going to be difficult to recreate the frenzied hype of the Wii, particularly now that the 'casual' gaming audience Nintendo helped create has since had the likes of free-to-play Facebook games, mobile gaming, Microsoft's Kinect and the PlayStation Move all vying for their attention over the years.

Instead, then, Nintendo decided to focus on the 'hardcore' gamers, the group of Xbox 360 and PS3 fans who - if stereotypes and internet communities will have you believe - had shunned Nintendo in the past and dismissed the Wii for its SD graphics and colourful games.

With them in mind, Nintendo released the Wii U with arguably the finest launch line-up seen on a console, with a large number of third-party games from series immensely popular with 'core' gamers - Call Of Duty, FIFA, Assassin's Creed, Mass Effect, Tekken and the like - but, crucially, every one of them had already been released on Xbox 360 and PS3 up to six months previously and were now sitting in shops for £20 alongside £49.99 Wii U versions.

More trouble for Nintendo

There were plenty of other problems Nintendo had to contend with this year. Some out of its control: the exchange rate made it far less money on non-Japanese sales; the Wii U was deemed too expensive for some despite Nintendo selling it at a loss; many gamers are holding fire and waiting to see what Microsoft and Sony's next consoles will offer. Some it has to accept responsibility for: the horrible Wii U TV ads with their Danone-style Eurodubs and their inability to effectively explain what the console does. All these factors came together to make the perfect storm for the company.