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As sales slip, Nintendo faces uncertain future

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Wii U - Nintendo

The winds of change blow swift and fierce in the video game console war. And it appears as though the once-unbeatable Nintendo is in danger of being blown clear off its perch.

It's a little hard to imagine the company falling out of the top spot, which they've gripped firmly for the past few years on the strength of their indomitable DS handheld and mass market miracle Wii. By way of innovative tech and user-friendly games, both systems set sales records, helping the company make competitors Microsoft and Sony look like outdated players in a quickly changing landscape.

But that finicky landscape is now leaving Nintendo in the dust.

Despite loads of hype and terrific press, the company has hit a snag with its 3DS handheld, a system that was supposed to usher in a new era of 3D gaming. It's yet to happen. 3DS sales have been lackluster and at times downright depressing; June even saw the venerable DS line outsell its shinier, fancier cousin.

And due to a lack of software and increasingly outdated tech, Wii sales have positively floundered. Analysts have noted that, compared to last June, Wii software sales dipped a stunning 75%, and monthly sales of the system itself are routinely eclipsed by Microsoft's Xbox 360. Based on the rest of 2011's Wii lineup -- highlighted by The Legend of Zelda: Skyward Sword, a new Kirby game and very little else - sales are likely going to keep dropping until the company releases their next hopeful hit, the Wii U.

In other words, 2011 isn't going to be easy.

"Until Wii U is available, the new console's short term impact will be negative on the market, particularly on Nintendo's share," said analyst Billy Pidgeon of M2 Research. "Wii hardware uptake has been slowing in the U.S. for over a year, and sales will now drag even lower with the announcement of a new system. New high value Wii titles such as Legend of Zelda: Skyward Sword are likely to improve Wii software sales, but third party Wii title performance remains sluggish."

Check out Nintendo's Biggest Hits...and Misses

Even Nintendo's vociferous fan base is beginning to show signs of mutiny. The company's refusal to bring a few very popular Japanese releases to the U.S. sparked a fan-inspired letter-writing campaign, though it hasn't paid off. And despite news indicating that Nintendo was finally joining the smartphone party by bringing Pokemon to mobile users, the company quickly shot down any thoughts that they're about to change course and start supporting Apple.

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Legend of Zelda: Ocarina of Time 3DS - Nintendo

Their strategy for only making software for Nintendo devices "hasn't changed and won't change," company spokesperson Yasuhiro Minagawa told  Bloomberg, leading to an abrupt drop in share price.

It's not all doom and gloom, however. Their critically-acclaimed remake of The Legend of Zelda: Ocarina of Time for the 3DS became the first title for the handheld to crack the Top 10, indicating that gamers are plenty interested in good software for the machine. With a slate of big 3DS releases due out this holiday -- including 3D takes on Mario Kart, Kid Icarus and Super Mario -- Nintendo hopes the system will help offset what's bound to be a slow holiday for the Wii.

And then there's that curious Wii U, which many believe is what the company needs to get back on track.

"Nintendo's hopes are all resting on the success of the Wii U," says Russ Frushtick, Games Editor for MTV News. "If that new console is able to provide comparable features to the 360 and PS3, while adding unique features all its own, there's hope that Nintendo can get back into the race.

"This is all a matter of weathering the storm until the new console releases," he adds.

Due out sometime in 2012, the Wii follow-up hopes to emulate the success of its big brother by emphasizing an innovative touchscreen controller, which will let players take their game off the TV and into their laps. The system also boasts HD graphics, but questions remain about its online game plan -- an area where Nintendo has traditionally fallen behind.

The good news is that Nintendo has plenty of time to dial in the Wii U, which, barring any sort of eleventh hour announcement from Microsoft or Sony, will make Nintendo the first of the big three to take the next console step. On the other hand, being first hasn't always paid off for console manufacturers. Sega, once a proud competitor in the hardware space, learned this the hard way with their beloved but ultimately doomed Dreamcast system, which was released just prior to the Playstation 2, Xbox and Gamecube trio. Three years later, it was discontinued, effectively ending Sega's run as a hardware maker.

Will the Wii U suffer the same fate? It's certainly unlikely -- there's loads of consumer interest in the system -- but time isn't necessarily on Nintendo's side.

"Unfortunately, [2012] is still a long way away and new consoles tend to take at least a year before they really hit their stride," warns Frushtick.

What do you think? Is Nintendo in trouble, or will the Wii U and 3DS win out in the end? Chime in below!

-- Play Bricks Breaking II on Yahoo! Games --

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