Nintendo stock plummets, but president Satoru Iwata says he won’t resign

Nintendo‘s Wii U is failing, but the company’s president said he won’t step down.

Early this morning, Nintendo reported that it is revising its annual forecast. The company now expects a net loss of $240 million. That’s counter to the publisher’s previous estimates that predicted it would bring in a net profit of $530 million. Despite these gloomy figures, Iwata insisted he will continue as president of the storied gaming company, according to Japanese news site Nikkei.

Nintendo’s shares, which traders exchange over the counter in the U.S., are getting slammed this morning. The stock price is down more than 18 percent to $14.70.

Why the huge reversal in fortune? Well, because the Wii U, the followup to the extraordinarily popular Wii, isn’t selling.

For its full fiscal year, which will end March 31, the company predicts it will sell only 2.8 million Wii U home consoles. That’s down from its previous estimate of 9 million. This failure to sell its latest system also greatly diminished software sales.

“In the year-end sales season, which constitutes the highest proportion of the annual sales volume, software sales with a relatively high margin were significantly lower than our original forecasts mainly due to the fact that hardware sales did not reach their expected level,” reads a Nintendo statement.

Nintendo expected to sell 38 million units of Wii U software for its fiscal year, but it now is only predicting that it will sell 19 million.

The 3DS, Nintendo’s popular handheld, is something of a bright spot. It was the best-selling gaming system for all of 2013 in the U.S., according to industry-intelligence firm The NPD Group. Even after accomplishing that impressive feat, Nintendo revised down its estimates for 3DS hardware and software sales.

Nintendo now expects to sell 13.5 million 3DS systems for fiscal year 2014, where it previously expected to sell 18 million. In terms of software, Nintendo revised that number down from 80 million units to 66 million.

Iwata took over Nintendo in 2002. He oversaw the company as it introduced the Wii system, which found a huge audience and led the company to massive profits. In 2007, following the Wii’s unprecedented success, Nintendo’s shares hit an all-time high of $76.87.

The chief executive was the architect of the Wii’s “Blue Ocean” strategy, which was the idea that Nintendo could make more money by targeting the wider audience of people that don’t consider themselves gamers. That worked largely due to the Wii’s intuitive motion controls and its pack-in Wii Sports game.

In 2012, Nintendo tried to re-create its success with the Wii U. The system came with a touchscreen controller, but it failed to excite the same “Blue Ocean” audience that the Wii attracted. Perhaps even more problematic for Nintendo, the Wii U is also failing to bring in many traditional gamers who are moving on to the more powerful systems from Microsoft and Sony.