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Squilliam said:
Hyperbole aside I do think that the Wii U is a relatively weak system. It has weak performance, high price and fewer redeeming qualities than the Wii had at launch and in my mind it shows that Nintendo are too insular and they don't really understand the needs of the wider market of developers nor the realities of how games have changed.


... and yet they are the largest videogame publisher in the world, and the market leading manufacturer in both the handheld and home console markets.

I would personally argue that it isn't that Nintendo doesn't understand the market but that "analysts" don't understand Nintendo. Between sales for the Wii, Nintendo DS, PSP and iPhone it should be clear that people want polished visuals and good gameplay not necessarily the most technically advanced graphics and gameplay. Nintendo believes that the market they alienate by producing systems like the Wii, Wii U, Nintendo DS, and 3DS is (relatively) small, expensive to keep happy, and is already aggressively targeted by Sony and Microsoft so they have ignored them; and I don't think anyone can say that this worked out poorly for the Wii, Nintendo DS or 3DS, and we will have to see how this works for the Wii U.

Ultimately, I think Nintendo is right ... Nintendo could have put together a system that was 8 times as powerful as the HD consoles, it would (probably) cost more than $500 to manufacture and they would have to sell it for (less than) $400 to keep people happy, without the Wii U tablet the average person would ask how it was different in a meaningful way from the HD consoles, and the graphics whore who complains about the Wii U still wouldn't buy it. Trying to appeal to these gamers is why the N64 and Gamecube are Nintendo's least successful systems even though they were (relative to their competition) Nintendo's most powerful systems.