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Oh I do believe that Nintendo knew what made the Wii a success, that exactly why they went with another "Weird" console.
Nintendo needs to find a way to help 3rd party developed games sell well on their consoles. Developers are tired of 2 things,
(1) Most of their games selling like shit, hence not making much profit.
(2) A console that is powerful enough to run their "online features" in their games and powerful enough on a whole.

That casual gamer will come and go, its the hardcore that will continue to place value in your console, Word of mouth spreads the buzz and the casuals jump on for the ride.
Her is the solution, Make a console that's catered to the "hardcore", release "games" that cater to the casuals.
Keep on Gaming.