Despite the fact that overall video game sales throughout the 2013 holiday season were at the highest point they have been in three years, Nintendo and its troubled Wii U console couldn’t catch a break. During 2013, Nintendo recorded a company-wide financial loss for the third business year in a row, begging the question of what’s next for the company and how long it can stagnate in the red before drastic measures will have to be taken.

Part of the problem for Nintendo is stiff competition. Both Microsoft and Sony unleashed new consoles during the autumn of 2013, and most holiday gift givers shopping for video games were clamoring for either the Xbox One or the Playstation 4. In addition, both Sony and Microsoft got boosts for their older systems by late-generation titles like Grand Theft Auto V, also released this past fall. In comparison, Nintendo hasn’t been able to offer much with its latest console – the Wii U – to attract gamer attention.

Nintendo president Satoshi Iwata thinks that the biggest challenge facing the Wii U is that it just doesn’t offer enough new features. Both the Xbox One and the Playstation 4 got major technical overhauls in comparison with their predecessors. At best, the Wii U has always seemed like little more than a sequel to the original Wii. And while that console was a huge success among loyal Nintendo followers and casual gamers alike, much of the good will toward the product has not translated to support for Nintendo’s latest hardware venture. Quite simply, buyers don’t see much reason to upgrade to the Wii U because they view it, by and large, as the same console.

“The company appears to have failed to differentiate the Wii U from the Wii,” Iwata stated, according to NEWS.com.au. He also indicated that his own son, a dedicated Wii player, had little interest in the Wii U – a problematic sign for the console if there ever was one.

Another issue for the Wii U could be a lack of strong games. The news of Nintendo’s financial struggles came on the tails of a tell-all article, where a third-party developer detailed the failings of the Wii U hardware and Nintendo’s failures to support third-party developers to grow its gaming stable. While the company continues to have strong first-party franchises at its fingertips, from Mario to Zelda to Donkey Kong, it still can’t compete with Sony and Microsoft, which round out their core franchises with strong third-party releases.

Regardless of the reason for the Wii U’s failure, things are starting to look bad for Nintendo. After a financial loss in 2012, Iwata vowed to get the company back to profitability, optimistically predicting a profit of 100 billion Yen. Iwata and Nintendo fell well short of that goal, going 35 billion Yen in the other direction. With numbers like those, it seems fairly clear that the Wii U is dead. At this point, Nintendo might be wise to cut its losses, build a completely new console, and use the new hardware as a vehicle back to prosperity.