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Their achilles heel is basically their old fashioned, stubborn Japanese management.

The studios are great, the games are great, they are held back by a management group that moves as slow as the Titanic.

If Nintendo had a great Western division to help out the Japanese side, they would be doing fine right now but they don't unfortunately. Even though Rare wasn't perfect, they were a very good sidekick that could fill in for Nintendo with a good number of games for example and Nintendo has never really replaced that lost output.