Barnes & NobleThere’s a reason Barnes & Noble was discounting its Nook line of tablets lately—the company is pulling back its investment into that side of the business, the company announced today.

It will stop making new Nook tablets, but will sell its Nook HD and Nook HD+ through the holiday season, according to a report in The E-Book Reader. In addition, the report states B&N will focus its attention on working with third-party vendors when it comes to tablets.

It will continue to create e-readers, however.

In a press release, B&N said:

The company plans to significantly reduce losses in the NOOK segment by limiting risks associated with manufacturing. Going forward, the company intends to continue to design eReading devices and reading platforms, while creating a partnership model for manufacturing in the competitive color tablet market. Thus, the widely popular lines of Simple Touch and Glowlight products will continue to be developed in house, and the company’s tablet line will be co-branded with yet to be announced third party manufacturers of consumer electronics products. At the same time, the company intends to continue to build its digital catalog, adding thousands of eBooks every week, and launching new NOOK Apps.

B&N reported its retail business was down 10 percent for the quarter and 5.9 percent for the year, according to analyst reports. In addition, Mashable reports sales of e-books and other types of digital content increased 16.2 percent for the year, but sales in the fiscal fourth quarter fell 8.9 percent.

This news doesn’t come as a huge surprise, as B&N has seen a downward trend in its Nook business. It’s also likely not the end of disappointing news for the company. B&N has felt the heat from Amazon and other online retailers for some time.

What do you think B&N needs to do to save itself?