"Well" is a loaded statement. Are (most of) the games and the system doing as well as last gen? No. Are they selling enough for the company to survive? Absolutely.
It's already the next-gen that interests me for them now. Like I said, even Gamecube level sales now seem to be out of their reach for the Wii U. Do they abandon consoles and just go with a multi-touch (so they can port Android/iPhone games) handheld that also streams to a TV? Who knows.
I agree that Gamecube level sales are out of reach for the Wii U, barring some miraculous turnaround for the Wii U's fortunes, of course. According to Nintendo's last financial results, the Wii U has sold 3.45 million units as of the end of March, which is fairly respectable. The problem is that sales have tapered off to such a degree that sales are virtually non-existent at the moment.
Looking at the 3ds, it's down yoy worldwide, which is not where it wants to be. It's now fallen behind the ds and has no chance of catching up, again barring some miraculous turnaround in sales.
At the moment, yes, Nintendo will survive, but only because of the massive warchest they're sitting on. They've posted an operating loss of around $825 million over the last two years - if they keep on posting those sorts of results, that warchest won't be around for much longer.
The main reason why Nintendo needs this warchest is to protect itself from hostile takeovers. If the warchest gets small enough, a company like Disney could swoop in and take over Nintendo's IPs, which would be disastrous.
I don't see what Nintendo can do other than go third party like Sega did. I can't see them competing in the console space, and I can't see handheld consoles surviving in the future. Smartphones/tablets are dominating already, and the gap is going to continue to grow even wider in the coming years.
Source:http://thenextweb.com/mobile/2013/05...013-app-annie/
The 3ds will make them money, that's for sure, but I can't see them releasing another handheld in the future and having it succeed, which is a massive problem.
I think, going forwards, Iwata and his team has to go. They're out of touch with the current state of gaming and they seem to be making bad decision after bad decision. It's quite disheartening to watch.