With Nintendo's Wii U seen as a flop just a little over a year into its life, reports have surfaced that the company is beginning to develop their next console already.

Dubbed the Nintendo Fusion, a "very reputable source" told Nintendo News the new console will be a handheld home console hybrid. It will be one part Wii U and one part 3DS. However, most of the reports on the Nintendo Fusion have said to take these claims with a "grain of salt."

Some of the specs of the alleged console will be a "Fusion DS" portable device that will run on a ARMv8-A Cortex-A53 CPU and a Adreno 420-based AMD graphics chips, reported BGR. Furthermore, this console is said to include a "Fusion Terminal" with a 64-bit, 8-core IBM processor, and Custom Radeon HD RX 200 graphics. Essentially, all these fancy numbers and specs indicate that it will be on par with the systems that are currently beating down the Wii U.

The proposed idea of the fusion play crossover, is in the vein of Sony's cross play with the Vita and PS4. For some games the Vita can serve as a controller for the home console.

Nintendo is projecting a loss of $335 million for their fiscal year end on March 31, which would make it their second annual operating loss in April.

For 2014 Nintendo has projected a loss of $239 million with a profit of $5.65 billion. According to Nintendo's financial report, the big losses are mostly attributed for lower than expected holiday sales which normally make up a large margin of sales.

Nintendo is forecasting in 2014 they will sell 13.5 million 3DS handhelds, and 2.8 million Wii U's. Initially the prediction was for 18 million handhelds and 9 million home consoles.

When launched the company had hoped to sell around 38 million Wii U's but they are on pace for around 19 million, giving them their lowest total for a console, excluding the Virtual Boy, to date. The 3DS' sales have been lowered from 80 million to a still impressive 66 million.

Nintendo's president, Satoru Iwata spoke to media today about the second consecutive failing year.

"There will be no major management shake-up in the short term," he said. "In addition, we did not assume at the beginning of the fiscal year that we would perform a markdown for the Wii U hardware in the U.S. and European markets."

"We therefore modified our unit sales estimates in accordance with our performance in the year-end sales season and after the turn of the year, and the drop in software sales had the largest negative effect on our profit forecasts."

See the full financial report here.