(Reuters) - Nintendo Co Ltd, the world's leading gaming company by machines sold, said it will post an operating loss for a second straight year as the sales of its Wii U, successor to the 100-million selling Wii, faltered.

The company caught investors off guard by predicting a loss of $220 million in the year to March 31, reversing a profit forecast for the same amount, putting its new guidance well short of a consensus estimate of 12.1 billion yen ($133.48 million) profit from 19 analysts.

The grim outlook came even as a weaker yen provides a boost for a company that sells almost three quarters of its products outside Japan.

"It was a somewhat negative surprise," said Yasuo Sakuma, portfolio manager at Bayview Asset Management.

Nintendo, which began by making playing cards in the late 19th century, is counting on the Wii U to revive its fortunes as sales of the six year-old Wii slacken.

The latest offering from the creator of Super Mario faces competition from Apple Inc and other makers of mobile phones and tablet PCs that are attracting gamers with cheap or free games.

"The sales of Wii U were smooth at the beginning but since the turn of the year they have been losing momentum," Nintendo President Satoru Iwata told reporters in Osaka after revealing the loss forecast. He blamed the lacklustre performance on a dearth of games titles to woo players back.

"Due to delays in software development, we had to postpone sales of software products we had planned to (release) early this year, which is interrupting our sales," he said.

As Nintendo's hardware business suffers, software sales are also dragging. The company slashed the annual sales forecast of Wii U software by 33 percent to 24 million units and that of 3DS software by 29 percent to 70 million units.

"We have been prepared to see weak sales forecast for Wii U as its sales performances in various regions have been widely reported. But it was negative to see a lower forecast for 3DS software as it is one of the company's main sales drivers," said Sakuma at Bayview Asset Management.

BONUS: European launch weekend sales and 5 week sales




"Next Gen"?

Once a new mario kart, mario 3d game, super smash game, legend of zelda game, and metroid game come out Nintendo will be back in the top spot.

Just giving the lessor consoles a chance to catch up right now. Good guy nintendo.

Not surprised. All of the massive headlining games are coming out for the Playstation 3 or Xbox360.

Ouch. I bought it the day it came out
There aren't many good games for it though right now

Well, people think is just an add-on/controller for the wii, so I'm not surprised.

I think Nintendo will be fine in the long-run. They're just in a tough spot. The new pokémon games in October will lead to a spike in 3DS sales for people who haven't yet upgraded, and other headlining games for the Wii U may help bolster sales. If that doesn't work, Nintendo will come up with a new game plan.

People want games, there are no games.

Same thing happened with the 3DS.

We'll see.

There aren't any games that people are clamoring for, so its understandable. Its partly their fault for releasing it without and big name games besides a Mario title. The launch titles for the Wii were much more impressive.

It'll pick up though once the other games get released.

oh no

The weak software that accompanied the system at launch, plus none of its features are particularly interesting or engaging. Nintendo will need to do better than a single-touchscreen controller and specs comparable to current-gen system if they want a foothold in the market.

After the disappointingly unremarkable run with the Gamecube, the Wii broke into the limelight with its novel motion-controls which enamored many gamers and non-gamers to the system, but the Wii U offers no such pull. I feel like Nintendo just wanted to get the system out as early as possible to get a heads up over the PS4 and Xbox720 and figured the software titles would carry it through the year, sadly that's not the case so far.

Even sadder is Nintendo's constant reliance on its exclusive titles (none of which were present at its launch sadly). Mario, DK, Metroid, Zelda, Super Smash, etc. Nintedo is now just a vehicle for these games' sequels and it's become glaringly obvious with the Wii U how it's becoming a 1-trick pony with novel hardware ploys and the sales have reflected that.

Well, it's technically their fault for not putting enough interesting games out at launch. Nintendo really should've waited another year before releasing it so they could put more of the mainstream titles with it.

I do agree though that once more Mario/Zelda/DK/Metroid/etc. games come out, sales WILL pick up. It's just gonna take a long time.

"The company caught investors off guard by predicting a loss of $220 million in the year to March 31, reversing a profit forecast for the same amount, putting its new guidance well short of a consensus estimate of 12.1 billion yen ($133.48 million) profit from 19 analysts."

at everyone thinking this will flop

did you see how the 3ds started off

once Mario Kart, Zelda, Smash bros and Yoshi U get released the sales will sky rocket