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RolStoppable said:

Okay, let me explain some important differences between the 3DS and Wii U.

1) The 3DS was never in such a dire state as the Wii U. Even at its low point, the 3DS was still selling three times better than the Wii U.

2) The 3DS never really had to worry about serious competition. The only time I thought the Vita could be competitive (at least in Japan) was right after E3 2011, because Nintendo still hadn't announced NSMB2 and was still banking more on stereoscopic 3D than actual games to sell the system. But in the six months between E3 2011 and the Vita launch several crucial things happened. Nintendo announced a major price cut for the 3DS and secured Monster Hunter exclusivity; Sony revealed that they were going to use expensive proprietary memory cards. At that point the Vita was significantly more expensive and had no system seller to speak of. Not to mention that third parties on the whole don't care much about handhelds, so first party software is of much higher importance overall. That's an obvious advantage for Nintendo. All this is a lot different in the home console market, so the Wii U is once again in a much tougher spot than the 3DS.

3) The Capcom support for the 3DS is a product of Nintendo offering strong incentives to Capcom. It isn't unlike Sonic Lost Worlds being exclusive to Wii U. That's always an option for Nintendo as long as any given third party is willing to enter such a partnership, but this has nothing to do with Nintendo building an installed base through first party software and attracting voluntary third party support.

4) Etrian Odyssey is an IP that is locked to Nintendo handhelds, because they are the only machines that can run the game conveniently. But yes, an argument can be made that new installments (or in the most recent case, a remake) wouldn't happen, if Nintendo didn't build an installed base. Shin Megami Tensei IV is a much better example though. On the same note, many publishers besides Atlus are bringing their games to the 3DS. This isn't really any different to how things went down on the DS. But all this leads into the point that will break the Wii U...

5) Third parties don't want to develop for Nintendo home consoles, especially not Japanese ones. You should know how things played out on the Wii, but let's refresh our memories on what Nintendo's installed base was in Japan. Let's see if the theory that third parties will bring the games if Nintendo drives up the installed base holds water.

http://www.vgchartz.com/yearly/2007/Japan/

So by the end of 2007, we have:

Wii: 4.6m
PS3: 1.7m
360: 0.5m

That's roughly 70% market share for Nintendo. The results speak for themselves.

1. The games are pricier and the console is pricier than the 3DS. The U will only sell when the games are there because currently the combination of price and library is deadly (as in bad). Once it's fixed the rebound will be steep.

2. Neither does the U. Nintendo doesn't compete with the other two in the home console space unless they suck so much that they lose the mainstream (PS1, PS2 style). That won't happen because they are already releasing games that ensure it won't happen. Much of your points are true, but it doesn't change the fact that with all those points, Nintendo is not competing against the other two. So the vita relatively is very weak compared to the 3DS which won't happen with the U due to your arguments, but it doesn't mean that the U will suffer.

3. I don't believe that is true. Nintendo mentioned sometime ago that 3rd parties were asking them to improve the install base so they could have more confidence to make their games for the 3DS. I believe RE:Mercenaries was the test for Capcom and then RE:R became a certainty after Nintendo revitalised sales. That was my recollection of it.

4. This is in my favor really. A good install base secured by Nintendo leads to the GB/GBA/NDS/3DS phenomenon of robust 3rd party support.

5. I'm not sure what makes you think that JP companies don't want to develop for Nintendo consoles. They don't want to develop your average blockbuster, but I can't stress this enough: those aren't the games Nintendo needs...

6. The Wii didn't lead by example and also came at the wake of the PS2. This is a very different situation.