1. A)I'm not concerned with Sony and Microsoft fishing in the blue ocean. They have only imitated what Nintendo has already done and aren't serious competition in that respect. They are entering a saturated market of fitness games (Wiii Fit, WF , Your Shape, EA sports active), minigame compilations(Wii Sports, WSR, Deca Sports, etc.) and party games.
B) I am concerned that Nintendo hasn't created a blue ocean game that catches fire like the others. Wii Party didn't pop off the way I was expecting. Software size or hardware wise and that makes me wonder if they have any other titles designed around fun and easy and popular premises left though we have yet to see Wii Relax or Vitality Sensor project or whatever you wanna call it.
2. If they can't ignite a fire with blue ocean titles then it is best that they start trying to capture both audiences. Having good online is definitely a large draw to the Madden, Cod, Halo, GTA crowd. Social games like Farmville etc teach us that having novel ways of interacting with others who are playing in a different location is also a draw for more casual players as well so long as it's not too obtrusive.
3. Lest they get hardware that is comparable to what western 3rd parties are expecting for next gen it's not going to happen. People will claim that 3DS support should signify different but if that were the case the Wii would be seeing excellent 3rd party titles as DS did get good support. Nintendo has always owned the Handheld market and support there means diddly squat for support of home console.
4. As I have some concerns as it seems most sequels in the Wii series have yet to outsell their predecessors. Could just be time on the market we'll see.
5. If NSMBW is any indication I don't see much wrong with giving people what they want.
Conclusion. Nintendo has a large fight ahead of it next generation. It's competitors are trying to catch fish in the blue ocean craze although they have been largely unsuccessful so far. I don't know if Wii owners will feel the need to update as sequels don't seem to sell quite as well which makes me wary of relying on them to purchase new hardware for sequels. They have done fine without 3rd party support or Brilliant online. But more than fighting their competitors over 3rd party titles Nintendo just needs to fight disinterest. But what is more popular that Sports, Fitness, Playing, Music and Partying that Nintendo can create an accessible fun game around? Will sequels be sufficient?
I still see Nintendo as being number one next generation but only because Microsoft and Sony don't know how to develop hit blue ocean titles(and even if Sony did they sure as hell wouldn't know where or how to market them) That may change given more time with their new more accessible control systems and get themselves out of those oversaturated genres they keep churning out.
