The earnings of Nintendo for the fiscal year ending in March 31 dropped 60.6 percent to 16.5 million yen, or $148 million, on total revenue of $4.53 billion, down by 8 percent.

For a company that has dominated the video game industry in the past, that is a relatively weak performance. As it stands, the Japanese gaming company is now trailing behind its rivals Microsoft and Sony.

Stock prices of the company have slightly dropped in trading, down 0.9 percent to $18.72 per share. When the sales of the Wii U console slowed down, Nintendo saw its assets, cash flow and profits falling as well during the year. The stiff competition offered by tablet games and smartphones have resulted in the sluggish sales of Nintendo 3DS.

There were rumors going around that the Japanese gaming company will announce the replacement of the Nintendo Wii U with its own NX dedicated game console due to its disappointing third place in the gaming console fight.

Eventually, the Japan-based company announced that it will roll out the NX in March 2017.

With Nintendo's full-year forecast falling short of analysts' predictions, it is not certain if the gaming company will be able to deliver a new hit product to rescue its sluggish Wii U console sales.

The company's net income may yet rise to 35 billion yen ($315 million) on revenue of 500 billion yen in fiscal year ending March 2017, according to a statement made by the company on Wednesday.

Nintendo also predicted that its Wii U sales will decline to 800,000 units from 3.26 million, and sales of its 3DS will also drop to 5 million from 6.79 million.

"Given market hopes that as its famous characters will slowly be imported in games targeting smartphones, we believe its poor forecasts might be ignored," wrote Amir Anvarzadeh, Japanese equity sales manager at BGC Partners Inc., in a note on Wednesday.

"NX will also keep some investors hoping for a gradual recovery," he added.