I'm certain that Nintendo is already hard at work on "what's next". But I don't think it's going to be what people are clamoring for around here (ie. return to classic controllers, focus on HD visuals, etc.). Nintendo is all about surprising people, pleasantly if possible. Going HD or reverting to the old gamepad style would not surprise anybody (though I'm sure it'd please a lot of the core users).
As for what they should do, the most basic answer is "assure the industry won't collapse while making themselves the inevitable leaders of the industry in the process". Which is what they're doing already, but that'll only work so long. As soon as somebody comes out with a Wii-alike that better suits the interest of the core demographic, things are going to get hairy. We could easily see a repeat of the 16-bit era "console war" should Nintendo go the direction people are pushing for.
The best move they could make is actually to stick with the Wii and DS for as long as possible, all the while custom-crafting and perfecting the next cycle of gaming, and once the Wii and DS are no longer profitable, turn the industry upside-down again with another disruptive technology that completely catches the competition off guard and gives them the edge. Nintendo has only ever suffered when they've tried to play hardball in the industry, and only ever benefited when they've thrown a curveball and mixed everything up. It would make good business sense to keep throwing curveballs instead of going back to hardballs.
Sky Render - Sanity is for the weak.
