Reggie made the Wii a smash hit, how quickly that's forgotten

Have you been living under a rock since 2005?  :P 

TES, Fallout, Dragon Age, GTA and other open world/semi open world RPGs and Action games have done nothing but grow bigger and bigger in the past decade.  In terms of the game's qualities, Xenoblade Chronicles X has plenty of system-selling potential.  The problem is brand power.  To sell systems, you need a lot of brand power and Xenoblade Chronicles X is only the second entry in the franchise (although it is tied to the Xeno- games of old).  So the issue here is whether Nintendo is willing to spend the money to quickly grow the brand power of Xenoblade.  It can be done.  Watch Dogs and Destiny  - while considered by many to be disapointing games as far as the end product - do show that you can very quickly build up brand power through marketing.  And that's what I think is really the problem here:  Nintendo has been very, very conservative in their marketing.  They have only spent serious money three times:  Mario Kart 8, Smash, and Splatoon.  And Pokemon OR/AS, if you count that (technically, that's the Pokemon Company's job).   I find it hard to believe they're going to put that kind of money into Xenoblade Chronicles X's push. 

When will it end? Every single AAA exclusive that has released for Wii-U is declared the end all be all of games, and is said to be a huge system seller. How far have we come, and it hasn't happened yet?

I'd believe it if Nintendo were pushing it more in the west, but after that very very sub-par E3 presentation that Nintendo had, I don't see the game doing very well outside of Japan. They basically just sold an old trailer for it, that lasted all of a couple minutes. I don't think the vast majority of the gaming community even knows it's a thing anymore. 

All those games you mentioned weren't held back by the console they are releasing on. The Wii U's install base is just 10m. Expecting a niche game to sell more than the previous game (which sold just 2m) seens unlikely. Its popularity won't grow and Nintendo would waste money advertising it heavily. 

I think people are being a little hard on Reggie. Keep in mind Reggie is a Nintendo executive. Part of his job is to spin things in a positive. What could he say? "You know what? Our lineup sucks, and I don't think anyone will buy a Wii U."

That being said, I think Xenoblade will move consoles, in a somewhat limited capacity.

I will buy a copy of the game simply to keep it sealed and resell it 10 years later

Pretty much every one of them did sell systems. Mario Kart, SSBU, Hyrule Warriors, Splatoon, etc all showed increased sales during their release weeks and a few weeks afterwards. The first Xenoblade sold the most in the U.S. This game is even more western-oriented. So I really don't see your basis for "not doing very well outside of Japan", especially when it did pretty average in Japan (will probably end up the same as the XBC if not a little less.)

The E3 2015 trailer had about 200k views. For a game that was announce two years ago, that is pretty decent (it debuted with 700k view counts.) It is obvious that Xenoblade X will sell at the very least 1 million life-time. Which practically guarantees it will sell some consoles. Considering its genre is atypical for Wii U, I think it has potential to sell more consoles than another platformer would.

That is what they said about Splatoon. *rolls-eyes*

Uh, the original game sold 900k.  And the original had no marketing, no hype-building in directs or E3, launched on the dying days of the Wii (months before Wii U launched), had a limited run in the States, and was exclussvie to one store chain.  The Wii's popularity among gamers - the people who would care about the game - was at an all-time low.  You are putting too much weight on the install base.  If install base was the big determining factor than Super Mario Galaxy 2 should have outsold Super Mario Galaxy and Legend of Zelda:  Skyward Sword should have outsold Legend of Zelda:  Twilight Princess. So in other words, the original Xenoblade was well on its way to selling over 1mil with everything going against it *but* the install base. Xenoblade Chronicles X so far has everything but the install base going for it.  It's gotten even more western elements, lots of coverage in directs and E3s, no stupid exclusivity, no limited printing run, no long delay between Japan release and localization, and is launching at a better time in the Wii U's lifecycle in terms of public opinion than the Wii in 2012.  All that remains to be seen is whether it will get a good marketing push. 

And you are using the term "niche" like it is intrinsic to the game, but there's no reason to believe that to be the case.  The game has numerous aspects that are right in line with mainstream desires:  a big ope world, heavy emphasis on player freedom, lots of character customization options (the very presence of a player-created character is a plus), exploration emphasis, a scifi setting, even multiplayer aspects.  Even the art direction - character models not wtihstanding - fall in line with a number of western titles.  This isn't a Persona game or a Tales game that has a number of characteristics that fly in the face of the mainstream trends and has to overcome them to be successes.  Xenoblade Chronicles X is a game that has no reason to be restricted to niche status.  It's all down to brand power and marketing.  TES has gotten ever bigger pushes as it has grown.  GTA, Destiny, Dragon Age, Watch Dogs, all the same story.  No game- no game - can be mainstream, can be a hit, can sell systems without spending the money to market it. 

good marketing would help , but xeno x received similar treatment like japan on marketing front welph