The console wars are raging between Sony and Microsoft (backing the Playstation 4 and the Xbox One, respectively). And off in the corner, twiddling their thumbs with a stockpile of Wii U’s that they released over a year ago, is Nintendo. The same Nintendo that revolutionized home entertainment with the NES; the company that pioneered motion-controlled gaming and brought the Wii into the American family room. Some thought that getting a head start on other next-gen consoles would give Nintendo a leg up in the console race, but sales numbers prove they probably jumped the gun.

Bloomberg reports that after a $240 million loss in 2013, Nintendo has cut sales forecasts to 2.8 million Wii U consoles, down from 9 million total units.

Ok, they’re in trouble.

Nintendo has always focused more no great games and player experience than top-line specs for their consoles, but clearly it’s time to pivot. That’s not to say they should throw immersive gameplay by the wayside, but Nintendo needs to concentrate on an evolving user-base that cares about graphics, hardware performance, and mobile gaming. Executives even mentioned that their change in strategy could include a focus on existing mobile platforms. In other words, we may see licensed games starring Mario and pals on the iPhone sometime soon.

Things look bleak. Nintendo’s executives would probably be the first to tell you that. But I’m not ready to lump them in with companies like Sega and Atari, now shells of their former selves. I see some encouraging reasons to believe in Nintendo’s return to grace:

  • From Mario to Zelda to Metroid to Pokemon, they have some of the strongest exclusive franchises out there. Nintendo could still be an immensely successful company as a game developer (apocalypse scenario, of course).
  • They still do platforming better than anyone else. Just check out this review for New Super Mario Bros. U.
  • Nintendo understands how to create an immersive experience for gamers.
  • They’re dipping a toe into cross-platform gaming with the next installment in the Super Smash Bros. series. It’s always one of their top sellers, and could help tip the scales on the “should I buy Wii U?” question.
  • The 3DS is selling, bust still not as well as Nintendo had hoped. They lowered forecasts from 18 million to 13.5 million.

Bonus read: Paul Tassi wonders how the Wii U would fare if it launched alongside the Xbox One and PS4. The two challengers sold more than 1 million consoles each on launch day, and Nintendo is trying to stop the bleeding. So, short answer? Probably not well.

Image via justusbluemer