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Yeah I think the "Nintendo tablet" that is a handheld on the go and can stream wirelessly to the television at home is the next natural extension of the Nintendo hardware concept.

They are simply too much of a niche player in the console business barring a Wiimote like miracle and with higher development costs, a niche base of 20 million fans just puts Nintendo in too much of a tough spot. It was more workable in the GameCube days when dev costs were lower and even then they seemed bitterly dissapointed with the GCN. 

To be honest the only "real" blue ocean that's immediately obvious now is sex gaming (lol) but of course Nintendo can't go there. Casual gaming, hardcore gaming are both red oceans now.