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Following December’s NPD numbers, Nintendo finally revised their Wii U sales numbers for the fiscal year ending March 31st, 2014.

They were saying they would sell 9 million Wii Us, and they’ve revised that down to a mere 2.8 million. Less than a third of an already low number.

It’s not all good for the 3DS either. They revised their projection down from 18 million to 13.5 million.

And now for Iwata’s damage control

According to Iwata, from Bloomberg:

We cannot continue a business without winning… We must take a skeptical approach whether we can still simply make game players, offer them in the same way as in the past for 20,000 yen or 30,000 yen, and sell titles for a couple of thousand yen each.

We are thinking about a new business structure… Given the expansion of smart devices, we are naturally studying how smart devices can be used to grow the game-player business. It’s not as simple as enabling Mario to move on a smartphone.

From the Wall Street Journal:

In a snap news conference called in Osaka, Nintendo President Satoru Iwata admitted he had misread the markets and hadn’t issued “the appropriate instructions.” He said the company needed to change and “propose something that surprises our customers.

Does that mean more gimmicks? Because what would surprise me would be a robust online store, strong online features, and a steady stream of games for multiple markets and demographics.

Iwata goes on to say “If we stay in one place, we will become outdated.” According to the WSJ “Mr. Iwata noted that Nintendo’s sales in Japan were better than they were in the U.S. and Europe, and said the company needed a better way of keeping in touch with trends abroad.” “In Japan, I can be my own antenna, but abroad, that doesn’t work,” he said.”

This, coming from the guy who dismantled Nintendo’s western support. From selling Rare to letting Silicon Knights and Factor 5 slip away to letting NST rot. Not to mention his company entirely abandoning the western audience it had done so well to build and cultivate on the N64.

But Iwata already knew this was a problem: in 2012, he told shareholders “Considering that the US and European markets are larger than the Japanese market in terms of the size of the population, sales in the US and Europe are supposed to be larger.”

The worst news out of all of this is that Nintendo does not seem to have learned a damn thing. Despite taking responsibility for Nintendo’s poor performance, Iwata will not resign.

I cannot take his statements seriously. The man has a long history of claiming to have learned his lesson, apparently just to placate investors while changing absolutely nothing. Go read Emily Rogers’ fantastic article “Satoru Iwata: Hubris versus Western Culture,” where she absolutely obliterates Iwata for his ignorance and arrogance.

We’ve seen the same mistakes from him again and again on every system since the GameCube, and every time he swears he’s learned his lesson. When will Nintendo’s board and investors wake up and boot this guy out?

So what is the answer?

The crazies are out as usual. In addition to the typical calls for Nintendo to go mobile or go third party, we’ve got Pachter arguing that Nintendo should temporarily develop software for PS4 and XBox One until it’s ready to release a new console.

Think about that. The company that’s still struggling with last gen hardware should suddenly leap another generation.

I’ll give you the answer. Drop the GamePad and sell the Wii U without it at break even or a little better. Don’t bother supporting it with anything beyond the minimum.

Crank out 3DS games to keep the money coming in.

Meanwhile, build and acquire as much western talent and western studios as you can. Not just game studios, but software, network, and online service people and companies.

Take the Wii U generation as an opportunity to rebuild. Put your new talent on building a world class online infrastructure and set of services.

Turn the Virtual Console into a video game Netflix – a one stop shop for every retro game in history. Make it just as ubiquitous too. Make this the one taste of Nintendo that goes beyond the walled garden – put it on other devices. Make it available on PCs as a Steam-like service. Have the games work with controller add-ons for Android phones. Maybe even other consoles. Make the service and your purchases available everywhere.

Meanwhile, get ready for the fight of your life in about 2 years when you release a console/handheld hybrid. One that’s built on Android and uses hardware similar to Android phones – something that can play every mobile and indie developer’s games day one.

Radio Splode 89: Fire Iwata, Nintendo Must Start Over