Alrighty then! Lets get to it:

I. Overfishing of the Blue Ocean

Nintendo with the Wii hit an absolute diamond mine by tapping into the "Blue Ocean" of non-gamers, family-oriented gamers (children, parents and relatives), and lapsed gamers (gamers for whatever reason have not gamed in 1 to 3 generations). You can only keep a good secret for so long and both Microsoft and Sony are bringing their fishing trawlers with their mile long nets into the Blue Ocean. Next generation, Nintendo will not have all the prime fishing spots they did in the first 2 to 3 years with the Wii. Microsoft and Sony will be in the Blue Ocean from the get go.

What was once a Blue Ocean with a sole fishing vessel with a Nintendo logo and Mario's face on it is now accompanied by Sony and Microsoft vessels where fishing lines will tangle and red blood in the water will be apparent from land.

II. Complete, Entire, Utter Underestimation of Online Gaming

Nintendo is stuck in the 1980s and 1990s when it comes to multiplayer. They think putting out a console so that the whole family can play is multiplayer. Sorry, but the younger and current gamers who buy games year round besides the Holidays conceptualize multiplayer as sitting alone in their room with their headset on and connecting with their friends via Xbox Live or PSN.

Is it no wonder that Modern Warfare 2 and Black Ops have had the best opening 1st week sales ever in the history of gaming? No, if you consider that the majority of video gamers conceptualize multiplayer as an activity performed online, not in their living room.

III. Lack of Top Notch Western 3rd Party Support

Sega, Capcom, Atlus and other Japanese developers putting out the vast majority of Wii 3rd party games. As Ben Stein used to say in Visine commercials, "Wow...." Really, if Nintendo wants to put the hurt, at this moment they should be knee deep in contractual talks with EA and Activision on how to bring their top notch multiplatform titles to the next generation. History gives us a bad guide where EA released Deadspace for the Wii and it bombed. Same thing is likely to occur with Activision and the Goldeneye remake.

IV. Overreliance on an Unreliable Gaming Market

For the same reasons many, including Sean Malstrom, praise Nintendo for the Blue Ocean business strategy, I raise just as many questions:

1. How many games do these Blue Ocean gamers buy per year? Year round game purchasing? Only during the holidays?

2. Are these Blue Ocean gamers one to three game players like the soccer mom who is a hardcore Tetris player?

3. How likely are Blue Ocean gamers to lapse and leave the market?

4. Do these Blue Ocean gamers buy new games besides just sequels to Wii Play or a new Super Mario Bros. game?

V. Overreliance on Milked Out Memes

Mario, Zelda, Metroid, and Donkey Kong are what Nintendo considers "core." Looking at Other M's sales, one can rightfully say Nintendo does not know what the "core" is. Metroid is about as "core" for a Nintendo franchise as you can get. From the first Metroid in the 1980s, Metroid was always the lowest selling "core" franchise in comparison to Mario and Zelda meaning it appealed to a very specific, niche of gamers who were crazy for Metroid:

http://www.vgchartz.com/worldtotals.php?name=Mario

http://www.vgchartz.com/worldtotals.php?name=Metroid

http://www.vgchartz.com/worldtotals.php?name=Zelda

As you can see, both Mario and Zelda have more mass appeal (sky high sales numbers and whether your sister would love to play it) than Metroid making them more "casual,"  NOT casual games. As a "core" gamer myself, my beloved franchises I am a devout fan of are Legacy of Kain and Fallout. Neither are known for their mass appeal or sky high sales numbers.

As for Donkey Kong games, with Donkey Kong Country you have another series with mass appeal. By any means, Donkey Kong Country is not a "core" game where only a few million crazed loons like myself will play through it at least twice, talk about the philosophy of the game in Internet forums, and shun other similar titles because it does not capture the spirit of the game.

Pokemon is in the same vein as Mario. Wildly popular and a never ending phenomenon. I have played Pokemon and I will say it is a great franchise deserving of every sale.

Finally, Nintendo for these holidays is re-releasing Super Mario Bros. All-stars for the Wii. Shouldn't these games have been on the Wii online service since day 1 for $5/game? Just another way Nintendo is milking out their beloved memes and I have not heard one complaint from a Nintendo fan over this. All I hear is well, it is great!

VI. Conclusion

I am predicting Nintendo will not be #1 in hardware sales next generation and if I am wrong then laugh at me all you want, but I will admit I am wrong and will have the heart to stay. Nintendo no longer has free reign over a neglected mass market of potential gamers, their concept of multiplayer is antiquated to say the least, since the SNES Nintendo has lacked any and all quality Western 3rd party support, and Nintendo's reliance on a new Mario, Zelda, or Metroid game every two years to please what they think of as the "core" has been completely shattered with the consumer's reception of Metroid: Other M.

What Nintendo needs to do is to study why Uncharted, God of War, the Call of Duty series, Halo,  the Grand Theft Auto series starting from GTA 3, and recently the Fallout series starting from FO3 have become what many consider "core' when asked, "What is the first video game title or video game series that comes to mind when you hear the word "core" or "hardcore"?" Looking at Nintendo's library in comparison to Sony and Microsoft's software library, it is front and center that Nintendo is more family friendly and family oriented in their software. Well, your 25 to 30 year old gamer who grew up on Super Mario Bros. 3 and a  Link to the Past just isn't into the 20th iteration of Mario or Zelda anymore. We have aged, experienced more games, and have come to appreciate games and game franchises that are, in many ways, antithetical to Mario and Zelda. We want a new, mature IP that is as epic as Mario and Zelda once were during our impressionable years as teens and Nintendo has not delivered for a long time.

Time to step your game up Nintendo because this upcoming generation will see the Blue Ocean painted with many shades of red.

tl;dr

Can't you just sum it up whether this is a "Nintendo is domed" or not and we'll tell you if we agree?

Nintendo is not doomed at the moment or in the next generation. They will be around, but with less visibilty than they had with the Wii.

Given the recent strong sales of PS3 / X360 whats to stop PS4 / X720 from launching at $800? It isn't like consumers sent Sony and Microsoft a bad message here.

I had the same face when Nintendo was getting American History X style curbstomped by Sony during the PS1 and PS2 eras. How quickly individuals forget about the failures that were the Nintendo 64 and Gamecube in comparison to their competition.

I think that Nintendo's success for next-gen will rely on the 3DS, if the parallax 3D effect is lame, or the initial cost of the system is so high/profitability is low, it could be a long gen for Nintendo

Moreover, after the NES dominated, third parties assumed the next Nintendo console would have a bigger base and they'd be able to compete with Nintendo by releasing better games from the start, establishing themselves as stronger brands. That ended up going to shit because of Sega's Genesis which lead the 16 bit market in the west into 1991-1992 but unless Apple releases a home console there is no reason to believe the third party plan from the NES to SNES transition won't actually work this time. The Nintendo device I think that will have trouble matching its predecessor is the 3DS, given the West is slowly adopting cellphone gaming as a method for playing games on the go. I don't know that there will be a 250m portable video game hw market for dedicated players this generation (DS is set to get to 170m or so and PSP is going to get to 80m or so).

Philosophically speaking, so long as Sony and Microsoft prevent any level of third party exclusives from manifesting on a rival device, Nintendo's content becomes the strongest exclusive content, and Nintendo hardware is the biggest. Wii pretty much owns entire genres this generation - party games, dancing, fitness. As of now there is no reason to avoid putting that kind of content on Super Wii even if Kinect / Move become sizable markets over the next year or two before Super Wii launches.

Facebook will have 3D HD cloud gaming in 2012 like onlive and it will play any PC game.

Consoles will be extinguished in 2014.

Saturn Total Sales = 8.82

N64 = 32.92

.............................

Xbox total sales = 24.65 M

Gamecube total sales = 21.75

I don't know about Saturn era, but in Gamecube era, Xbox dide a few million better saleswise, but while Nintendo had profit with the gamecube, Microsoft only had losses with the Xbox. And those losses ascended to many billions if you don't know.

They're only a failure compared to the Sony consoles.