Nintendo has proven to be incompetent in the hardware space both with limiting underpowered hardware but also with archaic OS/ services driving the hardware, they have however proven to be very competent on the software side of things where there games are beloved by many so much so that they move tons of games.
So the best thing Nintendo can do is exit the home hardware space, the competition is to fierce and Nintendo simply doesn't know how to effectively compete. Gamers would be much better served by Nintendo if the had Nintendo games on both Sony and Microsoft platforms. That way Nintendo can let Sony and Microsoft worry about hardware while Nintendo does what it does best, Nintendo games.
The Wii clearly showed how fickle the casual market is, when it was a hit it did huge numbers fast, but when the casuals moved to the next shinny tech, Wii numbers tanked, and now as a direct cause of that the WiiU is doing poor numbers. The only reason apple and now android excel in capturing the fickle casual market is because they release newer products every year, so the casual market always have that shinny new thing ever year. This is not how the console market works, so unless Nintendo releases a console every year to appease the fickle casual market they simply can't compete with the likes apple and android.
Think about this difference, in the console market it is software, the games that people want and this is why they buy the hardware, while new hardware does sell its self in the begging months after launch, it is software which drives hardware. This is why most people in forums always complain about any new console when it has little or no games, because in the console market software drives games. This is why new hardware is only released ever 6-8 years.
On the mobile/android markets, the one market that dominates the casuals, software is not the primary factor driving hardware, its hardware driving its self. No app is ever made exclusive to the newer mobiles/tablets which causes people to buy the hardware because of that app, no, instead the main selling point is the new shinny hardware which slightly more powerful so now it runs the same apps their previous devices ran but now a little faster.
This difference in the markets is why console makers like Sony and Microsoft and now Nintendo chase the core market and not the casual market, the core market consists of people who have gaming is a primary hobby, these people enjoy games and gaming and consume many games just as a movie buff would consume many movies during a year. Yes there is overlap here and there but the core market is a reliable market for not only console makers but also developers.
In anycase, having only 2 manufacturers making console is best, there is still healthy competation but also the car market can be evenly devided, with Nintendo making games on both Sony and Microsoft platforms so everyone can enjoy them just like people enjoy Sega games.
Welp thats my 2 cents.
