Nintendo hasn't been doing well recently—the company slashed prices on the 3DS earlier this year in a bid to boost demand, while Wii sales have fallen off dramatically in 2011. Nintendo already warned that its third quarter results would show a loss of 55 billion yen this quarter, but some analysts are predicting that the company's problems are much worse. Nintendo, it's thought, could have lost as much as $1.3 billion in the past three months.
The company is thought to be struggling with the falloff in Wii sales, the 3DS's inability to establish itself against a legion of mobile phones, and Japan's strong yen, which makes its own products more expensive to export. Nintendo incurred a 40 billion yen loss in the past six months (mostly against the Euro), and is projecting a full year operating profit of just 35 billion yen—a 27 year low for the Japanese manufacturer.
Opinions on whether or not the Wii U can turn things around are divided and hinge on whether the game's new controllers are hailed as a new innovation in a manner similar to the original Wii, or if they're dismissed as gimicky. Much of the argument has also focused on the question of just how much the Wii U will improve the Wii's graphics. The system will use a GPU based on AMD's RV770. That chip was significantly more powerful than anything included in the XBox 360 or PS3, but much will depend on how powerful Nintendo's custom implementation is.