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Wii U sales finally hit 10 million units as Nintendo nabs tiny profit

Nintendo's revenue was up 21 percent as the company tries to dig its way out of third place in the game console market.

Nintendo's Wii U has hit an important milestone: 10 million units sold. Nintendo

Nintendo's Wii U, which hasn't budged from third place in the console space, has finally reached an important milestone.

Nintendo sold its 10 millionth Wii U during its fiscal first quarter ended June 30, nearly three years after the console hit store shelves, the company reported on Wednesday in an earnings release. The milestone was undercut by disappointing Wii U sales of just 470,000 units worldwide during the three-month period. During the same quarter in 2014, Wii U sales reached 510,000 units.

Nintendo's portable gaming device, the 3DS, nabbed just over 1 million in unit sales during the period, up from 820,000 units last year. On the software side, Nintendo saw Wii U game sales jump year-over-year from 4.4 million units to 4.6 million in the last-reported quarter. Nintendo's 3DS software sales fell from 8.6 million in 2014 to 8 million this year.

The earnings release -- and the slow march to 10 million Wii U sales -- underscores Nintendo's ongoing trouble appealing to gamers across the gaming landscape. After leading the last console generation with its wildly popular Wii, Nintendo hoped for similar results with its Wii U launch in 2012. The company's device, which includes HD graphics and a gamepad that boasts a second screen for dual-display gaming, has not caught on in most markets around the world and has been relegated to third place against Sony's PlayStation 4 and Microsoft's Xbox One. In August 2014, Sony announced that it had sold its 10 millionth PlayStation 4 in under a year after the console's launch. It took Microsoft approximately a year to sell through 10 million Xbox One units. Nintendo's nearly three-year haul puts it far behind competitors.

In the portable space, Nintendo's once-dominant business has been significantly hobbled by the increasing popularity of games on smartphones and tablets. Gamers are now finding it more appealing to flip from a text message to a video game to Netflix, rather than hold a device dedicated nearly entirely to gaming.

Nintendo is also reeling from the loss of its leader, Satoru Iwata, who died at the age of 55 on July 11. Iwata helped Nintendo secure its position at the top of the gaming space with the Wii and was working at improving its current footing by modifying its strategy and building new hardware. The power vacuum has left Nintendo without a rudder and shareholders are concerned with where the company will be headed under the leadership of a new executive.

Prior to his death, Iwata made clear that Nintendo needed to make changes. He announced new hardware, codenamed NX, that the company would unveil next year, presumably to replace its ailing Wii U. Iwata also announced investments in "quality-of-life" areas, like sleep-tracking.

Perhaps most importantly, Iwata charted a course for Nintendo to break from tradition and offer its top gaming franchises, including Super Mario and The Legend of Zelda, on mobile operating systems. The controversial move, which shareholders had hoped to see for years, was an acknowledgement by Nintendo that the market is changing and the company needs to change with it or face the fate of other stubborn gaming giants, like Sega, that ultimately failed in the hardware business.

Iwata's vision for Nintendo is starting to financially pay off. Nintendo reported on Wednesday that its revenue was up 20.8 percent during its fiscal first quarter to 90.2 billion yen ($728.9 million). The company also posted a modest 8.3 billion yen profit, turning around its 9.9 billion yen loss in the same period in 2014. Nintendo's last fiscal year ended March 31 also showed promise as sales reached $4.6 billion and the company posted a $348 million profit.

Still, questions abound at Nintendo. The company has yet to announce a permanent replacement for Iwata and is so far unwilling to share details on its next hardware launch. It's also unclear how Nintendo's foray into the "quality of life" sector, which will offer non-gaming products intended to improve a person's life, will impact the company. And with a new executive coming in with ideas of his or her own, it's possible some things could change in the near future.

For its part, Nintendo didn't comment in its earnings report on what the plans are. It did, however, note that it expects its full-year sales to rise 3.7 percent this year. Its profit, however, will fall by 16.4 percent, the company estimates.

Nintendo declined comment on the earnings release.