Nintendo, hurt by three straight years of operating losses and abandoned by big outside publishers, is looking to Link, Mario, and other beloved characters to help salvage its struggling Wii U console.

Nintendo Looks to Popular Characters to Help Salvage Wii U Console

Gaming Giant Describes New Installments of Franchises at Conference

MAYUMI NEGISHI

June 11, 2014 12:04 p.m. ET

LOS ANGELES— Nintendo Co. 7974.TO -1.88% , hurt by three straight years of operating losses and abandoned by big outside publishers, is looking to Link, Mario, and other beloved characters to help salvage its struggling Wii U console.

The Japanese company used a videogame conference here to describe a barrage of new installments of its well-known franchises, including “Super Smash Bros” and “Legend of Zelda.” Following rapid sales of “Mario Kart 8,” which sold 1.2 million copies in the first four days after its launch at the end of last month, the company hopes the games will spur more Wii U sales.

Nintendo also plans to introduce interactive figurines of characters such as Pikachu, Link, and Mario and his sidekicks, in time for the key year-end holiday season.

Rivals Microsoft Corp. MSFT -0.61%and Sony Corp. 6758.TO -0.67% also used the Electronic Entertainment Expo to highlight forthcoming titles, but there was a key difference: those companies showcased many videogames from third-party publishers, where such partners were nearly nonexistent at E3.Ubisoft Entertainment SAUBI.FR -2.24% showed only one game playable on the Wii U, while Electronic Arts Inc. EA -0.53% had none.

Ever more reliant on familiar internally developed videogames and longtime fans, Nintendo is in danger of reverting to the niche player it was before the 2006 launch of the Wii console, a hit machine that for a time outsold Microsoft’s Xbox and Sony’s PlayStation.

Nintendo, protective of its brand, reduced the risks of glitches by bowing out of presenting live game demonstrations for the second year in a row. It instead released a prerecorded video that featured a CG combat scene between its chief executive and U.S. president and a barrage of chatter by Nintendo characters.

In that controlled setting, Nintendo of America President and Chief Operating Officer Reggie Fils-Aime said Nintendo fans “can always count on these games to deliver fun and great gameplay, because it’s Nintendo.”

The statement encapsulates what some critics call Nintendo’s arrogance and naiveté, while admirers see a commitment to polished and family-friendly games.

“They lack humility,” said Michael Pachter, an analyst at Wedbush Securities.

Mr. Pachter argues that Nintendo should swallow its pride and temporarily publish its popular software on other consoles, write off the Wii U, and focus on its next console. He said the new games—coming mainly in 2015—may help attract Nintendo fans who have yet to buy the Wii U, but will do little to win new users. “They’ve lost everyone except their core Nintendo fans,” he said.

Nintendo President Satoru Iwata has repeatedly resisted such moves, saying anything that weakens its hardware operations threatens its ability to innovate and come up with entirely new kinds of game play. Mr. Iwata wasn’t at E3, citing doctor’s orders against travel. He has previously declined being interviewed for questions concerning long-term strategy.

The Wii U has fallen short of Nintendo’s expectations since its launch. In the fiscal year ended in March, the company sold 2.72 million Wii U consoles, compared with 3.45 million a year earlier and less than a third of its initial estimate of nine million units. Last week, Nintendo said it would close its office in Großostheim, Germany, cutting 130 jobs, or 10% of its head count in Europe.

Shares in Nintendo have shed nearly 20% since the start of the year, underperforming a 7.5% decline in the benchmark Nikkei average.

Since releasing their respective consoles in November, Sony has sold more than seven million units and Microsoft has shifted more than five million units to retailers. Nintendo aims to sell 3.6 million Wii U consoles and 12 million 3DS hand-held game devices in the year to March 2015.

While critics may say Nintendo is out of touch or resistant to change, Mr. Iwata has pointed its past ability to transform itself. The company is exploring new business models to better capitalize on its rich intellectual property.

One is the new line of figurines, called Amiibo, which are equipped with near-field communication chips to store and share data from games. Mr. Iwata has said the new offerings are just a start, he told investors last month.