What Nintendo needs is the right software.
Look at the 3DS: There is no Brain Training, no Tomodachi Collection, no Mario Bros., Rhythm Heaven, Wario Ware, Kirby or any sort of 2D platformers or "pick up and play" games announced besides Mario Kart.
Nintendo saw its sales rise because they focused on a broader market. And now they simply ignore this market altogether. It's mind boggling. Imagine Steve Jobs walking on stage, saying "we lost interest in all of our iOS devices. We'll focus on the Mac instead!" And one year later, when sales plummet Jobs enters the stage again saying "We have NO idea why our sales are so low! It must be the prices!" This is what Iwata acts like currently.
There is no reason for Nintendo to stop making games for the core audience. But it is their job to create games like those I mentioned above.
Before Brain Training and Nintendogs the DS got outsold by the PSP in Japan. Without those games Nintendo would have been in the exact same position 6 years ago.
Why is it so hard to release the games mentioned above? They take less time to develop. They sell better. They are cheaper to make. And you need less developers for them so you can release more titles each year.
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