Sales of Nintendo Co.'s most important new gaming device have plunged since its release, the company said Thursday, prompting the videogame pioneer to slash its profit forecast and scramble to deeply discount the gadget to revive sales.

The unexpectedly weak demand for Nintendo's 3DS hand-held player, which displays 3-D games without glasses and was launched with much fanfare earlier this year, are a setback for a company that had been betting on a new hit to turn around its waning fortunes. The company cut its profit forecast...