I have to disagree with you. Nintendo needs 3rd parties more than they need Nintendo.

3rd parties only need a vibrant and wide userbase. With PS360/PC they have that. In fact, that base is larger than the Wii and additionally all share a very similar set of capabilities allowing far easier cross platform development by a single team.

Wii requires a different set of tools and a different dev team just for itself. You can't use gamecube tools as those largely didn't exist or were based on PS2; which is FAR lower in tech than Wii. This is why Wii gets tons of crappy games when we all know they could look and be so much better. Devs have been utilizing slightly improved PS2 based engines to make Wii games.

Nintendo makes hardware and software. They want they hardware to sell in order to sell their software. They know the best way to keep hardware selling is to have a string and diverse library selection. Wii was gaining this in 2007/2008. Then all hopes of even better selection with big 3rd party names vanished and since then all we've had to look forward to were largly 1st party games. With that you have a rapidly slowing sales of Wii systems. Its not dead, but its not even leading either.

Nintendo will focus on a far more similar base with special enhancements to ensure 3rd parties at worst can port the same game over and at best can add unique features to push Nintendo hardware as an almost unique experience.

Looking at the % of each console and dev budget of 6th gen vs 7th gen, I'm pretty sure it's financially more and at least equally viable to develop for the Wii than for PS3/360/PC. 40% vs 60% ( rough assumptions ) for half if not less the budget cost. Seems more like 3rd parties just don't want to.

Also, when you say "They want they hardware to sell in order to sell their software.", and the rest of the paragraph, the great library does definitely help, but it's the 1st party games that lead the sales, nearly always. Wii was selling phenomenaly in 2006-2008, when 3rd party games sucked somewhat, 2009's sales got an insane boost thanks to 1 game, NSMBWii. The flagging sales are because the 1st party games have gotten worst, and the 3rd party ones have remained meh.

The thing is, people want more than just games from consoles and handhelds now. Even though games won't get any better, they would gain more buyers with those features than by not having them. Sales of the console would be dramatically lower if console is only game console.

You can see how big game markets iPhone, Android and iPad has and how it is threatening Nintendo's handhelds (even though sales are still good). If Nintendo doesn't add similar features than competitors, it could be destroyed by competition in the long run.

While looking only at costs per system you're right. But, your ignoring the facts on the ground. These companies had already invested in the tools for PS360, where as for Wii it would require extra costs that they didn't originally plan for. Therefore they typically bumped up their last gen tech and we get mediocre games.

The only company that actually built a top notch Wii pushing engine, was HVS and they are not the best overall company. Had say Unreal engine been optimized for Wii (very much possible) or some other high end engine then things may have been different.

But for Wii its always about spending extra money for a single game version vs money they knew they had already spent and were going to spend for essentially three versions of the game that share a greater majority of resources and only need one single team to build.

i gotta disagree heavily with Superchunk's idea for the controllers. sorry for the long post:

first off i really hope that these HD screen controller rumors are false. that would add lots of cost and needed battery power and from what i can tell would primarily only be good because you could play multiplayer games right on your controller instead of having to split of the tv screen a bunch of times into your little quadrant (this could make it easy to have much more than 4 players playing on one system at once). But overall that just sounds like a terrible idea and would go completely against the simple, intuitive path that nintendo generally takes. and the reason why a touchscreen on the controller would be gimmicky as well and not worth it is because when you play console games you are looking up at the screen, not down at whats in your hand like when you play handheld systems. so forcing people to be constantly looking from the tv down to the controller to view the two different screens would be stupid.

secondly, you say wii would just keep their current motion plus controllers as their motion control for the new system. this would be a huge fail! I expect Nintendo to take 3 big leaps from the Wii to its successor. These three things are 1) fully integrated and intiutive online system (i.e. MUCH better than what the wii has). 2) Big jump in horsepower as the new system needs to be significantly more powerful than ps360 so that in comparison to the other next gen systems it will basically be the graphics equivalent of ps2 vs. the more powerful gamecube and xbox. so a bit less more powerful but still close enough to port games without much trouble, just dumb down some of the effects a bit. 3) A big advancement in Motion Control. This third thing is crucial.

Lets face it, while the wii controller is awesome and its motion control is cool, it is a very basic motion control device. the wii is the first motion control system, so thats expected. even with the motion plus it still isn't advanced enough to really let gamers do what they want with motion controls. plus, now you have Kinect that has a different type of motion control using camera recognition and capture technology. now without a controller there device is very limited. so the obvious conclusion is to combine the two types of motion control and advance them.

I see the Wii failing in the hearts of gamers and probably in the marketplace if it doesn't seriously advance the motion controller as well as combining with it with a kinect-sytle system. That way you have pure 3D tracking of the controller plus tracking of the whole body. Also I think both the left and right handed controller will have IR pointers (think awesome dual-wielding first person shooting!) The wii did a great job ushering in motion control as the new way to play games, but when the wii first came out all those cool fantasies we had of what motion control could offer never really found its way into reality with the Wii cuz the tech wasn't good enough. Now the motion tech should be affordable and without making the shift to advanced motion control the next Nintendo system will falter badly.

If the next system does these 3 things it will be golden. the final and ultimate thing for nintendo to do with their next system is to make the motion controllers in such a way so that the left and righthanded controllers can be connected in the middle to form a standard-like controller. this solves the problem of motion vs. non-motion games, it would mean that even games that are better played with the standard controller could use motion in a limited way (like SMG), this additionally solves the problem of having to offer two different types of controllers for gamers which would be very unattractive (who wants to buy 6 or 7 extra controllers to be able to play all their games 4-player), and you don't have to resort to some overly complicated, over clunky, and overly priced HD screen controller. the main innovation nintendo needs to come up with next gen is advanced kinect wii style motion controls with a combinable controller.

(just to give an idea of what this ultimate controller could be like: imagine a controller that is half way between the Wiimote and the nunchuck in terms of how it fits the hand, obviously one fitted for the left hand and one fitted for the right. shorter like the nunchuck, but with the IR pointer at the end. towards the top right on the lefthanded controller and towards the top left for the righthanded one the controller extends out on the side maybe an inch and a half with a sleek bulge. this might seem awkward but the protuberence would just be an extra part on the inside of the controller that wouldn't effect the way you hold it or any of the button placement. have these two bulges on the inside of the controller be connectable to form a pretty normal looking standard controller. they could connect electronically there too so that you can charge them together.  button placement on the lefthanded controller could be similar to the nunchuck: analog stick, maybe two buttons on the back. the righthanded controller would have two main buttons on the front instead of the Wii's one A Button, and maybe another two on the back. this way you get two face buttons, and four trigger buttons which would still have the simple button design that nintendo wants with just two face buttons but for standardly controlled games there are four extra trigger buttons. and analog stick would probably bit to the lower left of the two buttons which would make the right handed controller a little thicker than the lefthanded one probably. and a start/home button perhaps below the analog stick on the left controller. also include a better mic than what is in the wiimote and have rumble feedback. the perfect controller)

Just wanted to note that as more and more rumors leak, including these images, a lot of my OP is proving to be right.

Additionally, I don't understand people's rejection to what this system may turn out to be. It'll still have all the flair of the Wii, plus it will contian what the 3rd parties want in order to finally gain the full library Nintendo owners desire.

Sorry, but I think the rumors and my summation will be true.

Nintendo only failed in one area this gen; 3rd parties. Wii sold by the ship load and easily trounced its competitors. It was heavily profitable for Nintendo in hardware and software. It greatly expanded the market to households that would never have and probably still haven't purchased any other more traditional gaming console.

However, even with all of its market penetration and success, it never garnered the 3rd party support Nintendo assumed a market leader would get and deserved. Why? Because the costs to create a good Wii game were simply too great when they were forced to be 100% add-on costs to what they were already spending on PS360/PC development.

I'm positive these devs kept telling Nintendo that if the Wii had a more similar architecture and raw power base, they would port the same IPs over. But the Wii was FAR less powerful, completely different control base (as not everyone owned a classic controller), no HDDs, and an completely unique architecture that would require a new development tool.

So, now Nintendo knows a Wii will continue to sell and continue to offer pure casual and ported titles while they could build a new system that exceeds the power capabilities of PS360, offers the use of motion through backwards compatibility and makes a standard controller the default along with a unique enhancement that takes into account smartphones and other highly popular mass market interfaces.

While initial cost will be high ($350 to $400); by the time Wii is closed out (2015), this new system will be in the $250 price range where mass market appeal will readily kick in.

Knowing how Nintendo makes games, how 3rd parties will continue to offer 99% of their IPs as ports on all platforms, and the many possibilities of this next system, I feel excited and confident that it will succeed and I will enjoy it.

Also, as far as Kinect goes... I think it is greatly inferior to Wiimote or Move for that matter.

Kinect has major limitations, 2 player max is one and that it cannot function in the greater majority of game genres. Wiimote/nunchuk proved over the last few years to offer nearly perfect moton tracking, 4players, and every genre was capable of being played.

Move also has a setup that is merely a copy of what wii has (when you consider the motionplus) at an additional cost.

I don't think they need to improve the motion controller at all. For games where motion is actually desired, it has worked really well. Just Dance is an immensly better and more enjoyable experience than Dance Central. Same with WiiFit and any of the other fitness games out there. Fact is, a more powerful Nintendo sysytem with the motion plus enabled controller/nunchuk easily beats anything (motion based) offered by PS360 and is perfectly satisfying any motion requirements of any genre.

i'm not disagreeing that wii controllers are better than kinect. kinect is severly limited, but it is a seriously cool piece of tech. i just don't see how nintendo could bring out this hugely popular system (the Wii) with the innovation of motion controls and then they just don't update this innovation at all for the next system. that would just be lazy. consumers had 3 main complaints about the wii. bad online, last gen graphics, and their innovation (motion control) wasn't precise enough to create the game experience that gamers thought they'd get when the wii was first announced. those three things led to third parties not focusing on the wii. its not because they would have to build new games for the wii, they were willing to pay many times what it would cost to make a wii game to make ps3 or 360 games. a fraction of that development cost would have created a wii game. i mean its also because the gamemakers viewed wii as a casual console so they didn't even want to try to put the time and money into serious games on the wii cuz they thought there was no chance their games would sell well.

i love the wii, games like wii sports are super fun. but, its no secret that the wii controller isn't very precise at all. then they came out with motion plus, which admittedly i've barely used, but while it definitely seems to make an improvement on the precision of the controller i still don't think its up to par with what gamers are looking for. i mean from what i hear the ps move is maybe a little more precise than motionplus. so how would nintendo not take the oppurtunity to update their motion tech to a level of precision that could make motion control much more viable in lots more games? i mean it would be seriously lazy and terrible business for nintendo to rest on their wii technology. now maybe they won't also include kinect style motion capture tech in their new system but at the very least they need to make a more advanced motion controller. obviously microsoft and sony are gonna be putting out an advanced motion controller in their next system to go along with a standard controller, why would nintendo not prepare at all for competition from the other next gen systems??

an HD wii is not what people want. sure that would make sense a couple years ago if nintendo was just trying to compete with the ps3 and 360. but with their new system obviously they are trying to compete with the next gen consoles. so they need updated motion tech to do that.

Your missing my point... maybe I'm not being clear enough.

My OP states regarding the controller that essentially Nintendo's next system will have TWO controller options and both will be in the box.

1. The more standard controller that is enhanced with the new touch screen.

2. A wiimote plus/nunchuk.

Plus, all existing wiimotes will be compatible.

This means they will continue to motion offering as well as a return to the same controller base so 3rd parties will be able to port games easier.

One of my underlying themes is that 3rd parties dissed Wii as it was too different. By keeping the same base as other consoles, 3rd parties have a common base to work with and then can do minor changes to take advantage of specific unique features. This way Nintendo can have a highly successful system AND 3rd party support to push the system higher.

Now that E3 has passed I wanted to revist this thread to see how things are going. Items below are color coded based on facts and what is still unknown.

Things right:
1. screen controller with dual analog base setup.
2. at least equal to current HD systems.
3. Video/Game playback on new controller while TV in other use.
4. Large storage solution (though usb HDD or SD cards)
5. WifiN
6. More media playback (demos showed browser and netflix at least)
7. Fully backwards compatible with all Wii accessories/games
8. Will get same 3rd party support
9. High capacity media disc for games

Things not true or false yet:
1. More powerful than PS360 in order to be withing range of next consoles similar to PS2 and Xbox/GC
2. Android apps capable
3. Far better online connectivity to rival / surpass Live/PSN
4. Overall system UI
5. Natvie media playback (video / music)

Things proven incorrect:
1. 3D in the controller
2. No SD card support and built-in HDD
3. Bluray drive