Sales of Nintendo's Wii U and 3DS fell short of the company's targets last fiscal year, pulling its profits down to half of what it expected.
Nintendo sold 3.45 million Wii U consoles globally in its fiscal year ended March 31, 14 percent below the goal of 4 million Nintendo set in January. That goal was also a downgrade, from an earlier, rosier target of 5.5 million units.
The Wii U, the product on which Nintendo has bet its home console business, went on sale in November of last year. The company opted for modest processing and graphics, instead hyping the device's tablet-like controller and social features, which have so far failed to persuade consumers.
Nintendo said it aims to sell 9 million in the current fiscal year, but things aren't going to get any easier. Sony has announced its new PlayStation 4 will be out by December, and Microsoft is widely expected to announce a new version of its Xbox next month. Both consoles are to have far more graphics and processing power than the Wii U.
Nintendo sells the Wii U for less than it costs to manufacture, a common tactic in the console market for new devices. The console was snatched up by dedicated fans in the early days after its launch, but has failed to catch on with the everyday consumers targeted by the company.
The company has said it will not cut the price of the console, instead pushing out more games and features to lure buyers. In Japan, the company has launched an ad campaign showing fathers and grandparents using the Wii U to create and control their own avatars.
Sales of the handheld 3DS also came in below expectations. Nintendo sold 14 million during its fiscal year, versus an original goal of 18.5 million devices.
Nintendo said it hopes to sell 18 million 3DS consoles this year, a bet it can still succeed in handheld consoles when games on tablets and smartphones have become commonplace.
The company said that it rebounded from a deep ¥43 billion (US$432 million) loss last fiscal year, with a profit of ¥7.1 billion. But that was still about half of its target. Revenues were ¥635 billion, below both its target and last year's performance.