Wii U unable to recover despite strong software sales

Nintendo saw a drop in Wii U sales of 36 percent compared to the same period last year, the company revealed in its third-quarter fiscal earnings result for the period ending Dec. 31, 2013.

The company reported an operating loss of just over $15 million for the April-December period. However, thanks to the holiday season this was an increase in sales compared to last quarter. Nintendo recorded an operating profit of 21.7 billion yen ($210 million) based on an 84.6 percent increase in Wii U sales compared to the period prior. However, the company notes that the console still has a negative impact on Nintendo's profits.

The company recorded a 19 percent increase in software sales with 15.96 million units, although this could be attributed to the console's late launch in 2012. Nintendo recognizes that while first-party titles like The Legend of Zelda: The Wind Waker HD, Wii Party U and Super Mario 3D World recorded strong sales — each title shifted more than 1 million units — the "Wii U business as a whole was not able to recover fully." To date, Nintendo has sold 5.86 million Wii U systems and 29.37 million Wi U titles worldwide.

Nintendo moved 1.95 million systems over the holiday season, compared to last year's holiday figure of 3.06 million units. Nintendo revealed its expectations for a third consecutive annual operating loss earlier this month, stating that the projected operating loss is due to lower-than-expected holiday sales caused by missed hardware sales targets. According to the company, year-end sales constitute a significant proportion of annual sales volume.

Worldwide sales of Nintendo 3DS hardware and software for the period reached 11.65 million and 57.25 million units, respectively, down from 13.95 million and 49.61 million units for the same period last year. While the handheld was the best performing platform of 2013 in the U.S., according to Nintendo, it showed limited growth in the holiday sales season. However, the handheld recorded a 45.5 percent year-on-year increase for the Oct-Dec period.

For the nine-month period, Pokémon X and Y recorded 11.61 million units in sales globally. Animal Crossing: New Leaf achieved 2.79 million units in the United States and Europe, with 3.52 million units sold worldwide. Mario & Luigi: Dream Team hit 1.54 million units in the two regions combined, recording 2 million units worldwide. The Legend of Zelda: A Link Between Worlds reached 1.85 million units in the U.S. and Europe (2.18 million copies worldwide).

Global hardware and software sales of Nintendo DS, which include DS, DS Lite, DSi and DSi XL, sits at 110,000 units and 8.63 million units, respectively. Worldwide Wii hardware sales hit 1.07 million and software sales reached 23.27 million units.

Nintendo revised its hardware and software sales projections for the year earlier this month. The company now forecasts that 2.8 million Wii U consoles and 13.5 million Nintendo 3DS units will ship this financial year, a shift from the previous estimates of 9 million and 18 million, respectively. Wii U software sales are expected to reach 19 million units, down from 38 million. 3DS software sales were adjusted from 80 million to 66 million.

In response to the news, Nintendo president Satoru Iwata said he would cut his pay by half for five months.