Just posting because this is somehow unprecedented. Nintendo's home system ecosystem totally collapsed. I don't think many actually realize how crazy is this scenario. Even by considering Wii was based on casual audience - going from 100+ million system sold to....few millions is incredible.
It's obviously the combination of many factors, that reinforce each other negatively, including (a) price and little flexibility in dropping it; (b) lack of games; (c) long times between major releases; (d) total lack of third parties; (e) lack of proper online infrastructure; (f) lack of a major interest in the tablet, since tables are everywhere around us; (g) bad word of mouth by gamers and press; (h) lack of proper marketing; (i) confusion because of the name - people think it's a Wii extension somehow; (l) lack of innovation - the system doesn't bring anything interesting or different like, e.g. the Wiimote (this point is particularly incredible - coming from Nintendo especially).
Nintendo made all possible mistakes that could have been made - I can understand gambling on some of these factors, but hitting the negative target on each single of them is a total lack of proper R&D consumer research and system development. It's lack of professional attitude. Wii U was launched on the hype of the iPad and not considering the volatility and competition of is latter market, where everything gets copied really fast, consumer changes product every year and innovation vanish so quickly. Not a good basis for introducing a 5+ year home system. Nintendo's execs overestimated themselves because of DS and Wii's overwhelmingly successes - which, yes, were well targeted and constructed products, but that also benefitted from a certain fraction of coincidences and opportunism. Nevertheless, it's alright to recognize Nintendo's merits with DS and Wii - I think they offset what came from pure luck. Too bad this blinded them considerably afterwards.
Is this Iwata's responsibility? Yes it is, although it's cheap to say "it's all his fault". It's obvious people around him are as guilty as Iwata of being blinded toward the market's requirements. The reason of this failure is, beyond many other factors, that Iwata is a developer and not a businessman - and now this appears extremely clear. As much as he's really, extremely good in making teams below him produce high quality games and improve over time (yes, we can still say that, right?), he lacks skills for conducting proper business.
Ironically, what Nintendo need in reality is not to Iwata to step down, but a person to stay above Iwata and take care of the business part of the company. But I prefer not to give suggestions here.
Regardless of that, Iwata said that he would consider drastic measures for Wii U after Christmas figures..... There is little to do now, the tragic variables conditioning Wii U's ecosystem can be changed partially and the core of the disaster remain.
One possibility is to (a) offer a low price, tablet free Wii U package. Likely and doable, since we have the example of 2DS, which completely ditched the 3D effect. The price was very aggressive and marketed young audience - the one Nintendo always have been more successful, because of their IPs. This would help expanding the userbase and would maybe also bring back some of third parties multiplatform games (but I'm not betting on that).
Or (b), get rid of Wii U and announce another home system launching at the end of 2014. But this is less likely, for the simple reason they never be ready. They weren't even for Wii U's launch - a new system next year? LOL. Nintendo is a small company, but not as small to deviate the ship from the current path. However, they can take bigger and faster adjustments than other companies like introducing consistent modification of the current system.
Wii U clearly is a failure, but it would be nice to have it profitable eventually. In the meantime Nintendo will hopefully learn something and start thinking on the next home system.
