OSAKA, Japan—Hit by dismal sales of its flagship Wii U game console and of game titles, Nintendo Co. slashed its sales forecast and said it would post an operating loss, heightening the pressure on the company for drastic steps to turn around its business.

The Japanese game maker said Friday that it expected to sell just 2.8 million Wii U consoles in the year to March—less than a third of initial estimates. That means that despite price cuts and a rich lineup of titles like the latest entrant in its "Super Mario Bros."...