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Nintendo in the red for a third year as Wii U sales flop

An E3 attendee plays with a Wii U GamePad at Nintendo's booth. In this game, Game & Wario, it is used as a way to zoom in on certain portions of the s...
Game ender? Nintendo warns it expects a third annual loss as a result of slumping sales of its Wii U consoles.Devin Coldewey / for NBC News file.

Nintendo says sales of its Wii U consoles have flopped, pushing it to a third consecutive annual loss and raising questions over its future in a home console market increasingly dominated by Sony and Microsoft.

The Japanese company that got its start making playing cards more than a century ago slashed its global Wii U sales forecast for the year to March 31 by almost 70 percent to 2.8 million units. It cut its sales forecast for its handheld 3DS to 13.5 million units from 18 million. The Wii U is the successor to its hit Wii console.

Nintendo's president, Satoru Iwata, who last year pledged to return the hobbled game maker to profit this business year, apologized to shareholders at a briefing in Osaka on Friday, but said his failure to fulfill his promise did not mean he had to resign.

"There will be no major management shake-up in the short term," Iwata told reporters.

Pressure will likely mount on the architect of the Wii success in 2006 to step aside or shift course to focus on making money from "Super Mario" and other software titles. Nintendo so far has refused to allow its games to be played on machines built by competitors or on tablets or other mobile devices that are used by gamers.

In the past the company has blamed a lack of titles for poor sales, but even its popular family-friendly games are losing out on sales to more hard-core titles like "Grand Theft Auto" played on rival machines.

"The fact that the 'Wii U strategy' has failed is disappointing and will likely trigger a sell-off as soon as the market opens," said Makoto Kikuchi, chief executive of Myojo Asset Management.

Nintendo said it now expects an operating loss of $335.76 million this business year.

The latest warning comes just three months after the company reiterated its sales projections for the Wii U, counting on the console to revive its fortunes as Microsoft released its new XBox One and Sony released its PlayStation 4 to the public.

"We failed to reach our target for hardware sales during the year-end, when revenues are the highest," said Iwata.

In 2006, Iwata was celebrated worldwide after creating a new niche with the Wii console designed for the whole family to use rather than hardcore gamers. That success boosted Nintendo's cash pile to around $14 billion, money it will have to dip into again to help cover its latest deficit.