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I think Nintendo honestly is done with the traditional home console concept if the Wii U doesn't succeed past the GCN/N64 levels.

That will make it 3 out of 4 successive console generations where Nintendo has gotten fairly throughly spanked and competing with constantly more powerful home consoles just drives development costs higher and higher which doesn't work for Nintendo if they're limited to that same 20-30 million size niche userbase.

I think their next game hardware will be a gaming tablet, roughly as powerful as the current Wii U, that can stream to a TV when its nearby a TV set. This will let them reuse Wii U assets/engines as well, which will come in handy if the Wii U doesn't make the profits they were hoping for.

I can see them getting into animation for TV and possibly movies as well to expand their business in the future. It was something Yamauchi proposed anyway and it could become their new "second tier".