Nintendo CEO Satoru Iwata has issued a rare apology, admitting that poor marketing and a lack of killer apps have led to the Wii U's current predicament.
Iwata stressed that both of those issues are Nintendo's fault.
"We are to blame. We relaxed our [marketing] efforts, so the consumers today still cannot understand what's so good and unique about the Wii U," Iwata told CNBC.
"Because we're always trying to be unique, it takes some energies on our side to [make] people understand the real attractions about whatever we are doing.
"We have been unsuccessful in coming up with one single software with which people can understand, 'OK, this is really different."
He admitted Nintendo had relied too much on the Wii brand. He said the company needed to do more to get the console into the hands of the casual gamers that bought the original Wii.
"Because there’s not software that's simple and obvious for people as 'Wii Sports' for the Wii, potential consumers do not feel like trying the Wii U," he said.
"Our challenge today is with the software lineup we are introducing now, we have to encourage [people] to experience the Wii U in the first place."
His comments were followed by Nintendo of America's head Reggie Fils-Aime who dismissed the threat of the Microsoft Xbox One and Sony PS4.
Speaking to Kotaku, he said: "It puts no pressure on us at all. Sony and Microsoft are going to do what they’re going to do. My bet is that there are going to be more announcements the closer we get to whatever their launch date is.
“From my perspective, I can't focus on that. I have to focus on: How do we satisfy the needs of all of the consumers out there with Nintendo products? How do we make sure they understand our proposition? How do we make sure they’re excited about the software that we offer?
"From that standpoint we're going to let our competition do what they're going to do."