Many people believe the wii u is actually weaker than 360 and for many parts of the spec it is. We know that the cpu performance of the wii u is crippled because we know it has 3 basic 32bit risc processors running at 1.25ghz. So the insanity is the people that seem to believe the wii u is more powerful when many games simply can't perform to the same level on wii u as they do on 360 and PS3 because of their cpu requirements. The actual reality clearly supported by the evidence is that the wii u is at approximately last gen performance, less cpu power but more gpu power means some games are better and some are worse. It is utterly amazing that people can't grasp this obvious reality when we know the the cpu and memory bandwidth performance of the wii u is very low.
The issue for third party developers has always been I guess the customer base of Nintendo products. A little younger, less mature and not as wealthy often depending on parents to buy their consoles and games and a poor market for mature games. Often it seems marketed as family friendly and for young children. Often the consoles themselves are robust and capable of taking a few knocks too.
Add to that Nintendo's reputation now for weak or flawed hardware many developers simply can't work with Nintendo hardware. Bethedsa couldn't work with the wii for their games like Oblivion, Fallout 3 and Skyrim the hardware was just too primitive and for Fallout 4 etc the wii u is clearly even weaker than 360 and PS3 for such a cpu intensive game. There is no supporting hard drive either for streaming in a lot of data fast. So even in the case of the wii which had a huge market share, it was the wrong hardware and the wrong customer base and was simply ignored.
How does Nintendo come back from this situation? They clearly need a sexy, stylish and reasonable powerful console that will appeal to a wider audience and one that is capable of running the lastest games ideally using x86 architecture. It needs to be adult friendly and look like a fantastic bit of technology under the tv. A console that no adult will be ashamed to own. They need launch games with mature appeal that will get such people to get their wallets out. Is it possible for the Nintendo brand to move back into that space easily? I don't know but the legacy of the wii was a console with crap games, it was often joked about the wii gathering dust as those who had bought it for mainstream gaming were bitterly disappointed with its low performance level and the same can be easily said of the wii u where mature games are generally a disaster not capable of running at 360 and PS3 levels let alone ps4 and xbone.
For me personally the Gamecube was a huge success. I loved its games and found it a brilliant console. I think for those who owned it they could say they were generally satisfied with what was available. Many brilliant exclusives, good multiformat support and the console itself had some nice functionality especially the blisteringly fast loading times. Clearly the design was not mature friendly though. You can't imagine anyone buying it who didn't have children unless they were a real nintendo fan.
Now more than anytime before the mature market is where the money is because casual gaming is saturated with hardware and software at very low prices. It's only really dedicated reasonably powerful hardware that can get away with £20/$30 plus software pricing. That's where Nintendo need to be I think. If they can't do that they need to realise they are dealing with a market niche and be profitable even if the hardware sells sub 15 million units or even units lower than 10 milliion. They need to reign in R&D and create a product using more off the shelf-components with less customisation. What other choices do they have either play for the big time or go neogeo style niche market direction.