Throughout the past year, Nintendo CEO and president Satoru Iwata has maintained his belief that the company will turn an operating profit of ¥100 billion yen in its fiscal 2013, even in the face of disappointing Wii U sales. Today Nintendo has finally revised that estimate, now forecasting an operating loss of ¥35 billion ($336 million) and net loss of ¥25 billion ($240 million), in what can only be seen as a huge backtrack for the Kyoto video game giant.

Nintendo also now expects to sell just 2.8 million Wii U consoles this financial year, down from an estimated total of 9 million — a drop of 69 percent. While the company will no doubt have received a sales boost to some degree during the holiday shopping season, it managed to sell just 0.46 million Wii U systems in the first half of the year, so the 9 million figure has been dubious for a while.

Nintendo admits that it failed to sell as much software as it had hoped for over the holiday season due to the fact that "hardware sales did not reach their expected level." The profit and sales estimates always looked optimistic in the extreme, so the revisions won't come as a surprise to many. Whether it will jolt the famously conservative company into changing its strategy, however, remains far less predictable.

Update: Iwata has issued a statement offering further explanation for the revised forecasts.

"Wii U sales, on the other hand, showed some progress in the year-end sales season as we released various compelling titles from the summer onwards, launched hardware bundles at affordable price points and also performed a markdown of the hardware in the U.S. and European markets; however, they fell short of our targeted recovery by a large margin. In particular, sales in the U.S. and European markets in which we entered the year-end sales season with a hardware markdown were significantly lower than our original forecasts, with both hardware and software sales experiencing a huge gap from their targets. In addition, we did not assume at the beginning of the fiscal year that we would perform a markdown for the Wii U hardware in the U.S. and European markets. This was also one of the reasons for lower sales and profit estimates."