Nintendo president Satoru Iwata has said the company lost out on sales this generation by seeming to neglect core gamers during the early stages of the Wii's lifecycle.
"If you ask us whether everything Nintendo has done was right or whether we would use the same tactics if the company's policy or strategy remains the same, there are issues to overcome," he admitted.
"For example, the Wii was able to reach a large number of new consumers who had never played games before by bringing hands-on experiences with its Wii Sports and Wii Fit. However, we could not adequately create the situation that such new consumers played games frequently or for long, consistent periods. As a result, we could not sustain a good level of profit.
"Moreover, regrettably, what we prioritized in order to reach out to the new audience was a bit too far from what we prioritized for those who play games as their hobby. Consequently, we presume some people felt that the Wii was not a game system for them or they were not willing to play with the Wii even though some compelling games had been released... Once consumers have a notion that 'this system is not for us,' we have learned that it is extremely difficult to change their perceptions later.
"Therefore, in promoting the Nintendo 3DS and the Wii U, we have announced that we would like 'width' and 'depth' to coexist. With the Nintendo DS and the Wii, the approach of 'width' was well accepted by many people; however, what we did in terms of 'depth' was not satisfactory for some consumers. This time, we would like consumers to be satisfied in both aspects.
"In order to do so, we started to work on the 'depth' aspect first, and the current and existing software you can see for the Nintendo 3DS is based on that idea. In the future, the approach will evolve. By exploring the development both from width and depth standpoints, it is our intention to satisfy a wider audience with one gaming platform.
"Our approach for the Wii U is basically the same. By doing so continuously, we are expecting that the number of game users per household will increase and as the gaming population increases, we believe we can create a sustainable video game market. We would like to materialize what I have said for both the Nintendo 3DS and the Wii U in the future."
Iwata added that his remarks weren't an indication that Nintendo has abandoned its desire to further expand the gaming population.
"Right now, we are in a tough situation in terms of the financial performance, so it is probably fair for you to wonder whether what Nintendo has exercised was off point. On the other hand, we wonder what would have happened to the video game industry if we had not made efforts to expand the gaming population, and whether you would be able to see a bright future for a kind of entertainment in which the number of new consumers was not increasing.
"From these viewpoints, my belief has not changed at all. Without making efforts to increase the number of new consumers and make video games accepted positively by society, we cannot expect a brighter future than now, so we will continue to make these efforts."
Last week Nintendo reported its first ever annual loss for the year ended March 31, 2012. DS and Wii sales declined by over two thirds and by a third during the 12 month period respectively.
Nintendo also said it will showcase the final Wii U hardware at E3, although pricing won't be revealed until a later date.