Today the Wall Street Journal reported that Nintendo’s fiscal year loss for 2011 was three times greater than the company projected, coming in at $836 million. For those who have been following this blog, Nintendo’s rapid fall from grace should come as no surprise. Back in 2009, at a time when Nintendo could do no wrong, we praised the company for its innovation and ability to broaden the appeal of video games, but we also warned that new products like Kinect (then known as Project Natal) would likely pose a threat (see “Disrupting the Disruptor” – Jan. 2010).
To counter this threat, we recommended that Nintendo launch an HD version of the Wii and drop its existing console price to below $100 to appeal to late adopters. Although Nintendo is finally undertaking such changes, it is far too little and far too late. Then Nintendo made matters worse by launching its 3DS at $100 higher than previous handheld launches, all but killing the goodwill it gained from extensive and favorable press coverage.
Finally, consumers are currently reluctant to purchase new Wii consoles in anticipation of the Wii U, set for launch later this year. Although the Wii U may provide Nintendo with a short rebound, I cannot see how it will be able to reverse the company’s overall decline.
Prof. 
I actually blame smartphone games in Nintendo’s and Sony’s sales difficulty. People settle for small games in their phones, but really it’s not worthwhile. I’ll support console gaming by buying their original games!
You hit the nail on the head. Even back in 2008 when I was working on the book manuscript, mobile phones were beginning to make a big impact on the mobile gaming market. At the time, I wrote: