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The reason, imo, Nintendo's core consoles (Wii is not apart of this argument) have continued to dip is because they refused to compete directly. Instead of buying studios to make mature rated games like Sony, they rely on their own studios to make great, E for everyone games. Ever since the Genesis, companies have continued to capitalize on the mature audience. Nintendo, for the most part, has ignored it.

This trend will continue until either they're out of business, gamers decide they don't like mature, darker, adult originated games, or they acquire a bunch of studios and put some huge Uncharted like games on their console, coupled with third party support.

Those are the only three scenarios that I see possible. There is no fourth.