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Here's what Nintendo should have done...

Went on a hiring spree about 5 years ago (when they were rolling in money) and bulked up considerable so that the next generation Zelda, Mario, Mario Kart, and Super Smash Brothers would be done cooking by early to mid 2013 or prioritize them so that at least 2 of them were completely done by then..

They should have told Retro to start working on a new sci-fi FPS IP and give them at least 3 years to build it.

Nintendo of America should have hired a bunch of the best online developers in North America and Europe to give them an online infrastructure that rivaled the other two. They should also have placed a major emphasis on getting all the major franchises from third parties including letting them be in on the hardware development process and bending over backwards to give them any help they needed.

As for the console is should have been somewhere in the range of the Xbox One and PS4. Considering Sony is likely selling at near break even it wouldn't have been impossible for Nintendo to bring out a new console for $399 or even $349 if they didn't go with GDDR5 memory.

They could of then launched in early November with a much more traditional (and powerful) console along with Super Smash Brothers, Retro's new IP, Zelda along with a slew of third party games and possibly a big moneyhatted third party exclusive and they would have had the strongest launch lineup.

Then it would have been a real race instead of them being in the place they are now.