You all know how Nintendo dipped into the casual space in the Wii and DS era. This made sense for them since they had completely lost their control of the teen market, the market that does not prefer cartoony and childish graphics and themes. Not necessarily the market that likes guns and violence either, just not childish themes.

The transition went from games like Mario64, OoT, Goldeneye, starfox to games like Wii Sports, Animal Crossing, NSMB and  Mario Party.

Of course, in both eras you'll find games from the other pole, but the bulk transitioned from one pole (non-childish games) to the other (childish games).

With Nintendo finding absolute success again in the casual space in Japan, literally dominating their competition thanks to the 3DS, they are now in a position to renew their ties with the Industry. Just yesterday, Iwata was praising Capcom on their excellent game, MH4, which targets exactly the type of audience the N64 and PSX did back in the day. It also seems like their ties are growing.

What this means is that, now that Sony is out of the way in Japan, Nintendo can finally live and breathe within the industry and find its place once-again as the all-around entertainment provider of the industry. Not just for kiddy content, not just for kids and adults, but for all ages, including teens. And though Nintendo also sold games to that market for the Wii (Xenoblade, Pandora's Tower), the games were never highly marketed and didn't catch on due to Nintendo having lost ground in that market. I foresee, with Nintendo's continued domination in Japan, a growth in the enthusiasm of the industry and market for those games on Nintendo platforms, allowing Nintendo to finally shed out of that stigma it gained of being a company that makes games for kids.

This is my dream, make it happen N.

First I don't think Nintendo wants to let go of their family-friendly/kids-centric image. It makes them money and there's not a lot of competition on that side of the market. So long as Miyamoto/Iwata are the higher ups in the company I don't see that changing, and maybe that's for the best anyway.

Second, I do think Nintendo will make some big changes, but much like after the GCN generation, it will take them until this generation is over to really fully digest what's happened to them.

Right now I think they're still in the "oh sh*t! There's no possible way a Wii successor with a Mario game could be doing this poorly" shock phase.

From my perspective, I feel like they're in the "oh s***! we dominated the top 20 for the past two weeks and MH4 is going to make japan go wild" shock phase.

I don't really think sony is out off the way in japan, the ps4 will most likely become the go to japanese game console while the ps vita is really hitting it's stride, even with a weak selection off games

Home consoles are finished in Japan IMO. A future Nintendo console/handheld hybrid type device will probably be the final nail in the coffin and I think that's closer that some people might think.

I've been thinking this as well.

Tho how the hybrid would exactly be, is still up in the air.

Home consoles are hardly finished, There is still a huge audience for it and when it's all said and done, the ps4 should do well over 10m

Plus, Japanese devs struggled to make the transition into the 7th generation, and when you factor that most off them made their games exclusive to the 360, that was never going to end well.

Nothing lasts forever.

Teenage/college age males tend to have to most disposable income to spend on games and the most free time to play them.

Nintendo knows, what they're doing. Sure, they still have games like Wii Fit U and Wii Party U, but they announced games for 2014 that already look good.
I think with new hardcore games like bayonetta 2 or X, with a (hopefully) straight Number of 3rd Party titles, and with the good controller, they'll succeed to bring back hardcore Gamers to Nintendo.