It's interesting that a point of conversation here is the 3DS - and I agree with that. For me it's the bigger concern. It may end up selling barely more than 50% of the DS, even if it has 80% of the handheld market. This tells me that many "new" gaming consumers are not picking it up, and it's not keeping many of the previous owners. There is also little reason for future buyers to pick it up since most of the key titles have released. It will continue to sell solid, especially with price cuts, but its growth is limited.
When I look around society, I see iPads as the hot item with kids. It's hard to blame them, it's what their friends have it just looks so damn cool. The constant update of these devices also makes Nintendo's system seem dated. They need to act now. A new handheld device needs to launch next year, and it needs to be more impressive than an iPad. It needs to look cooler and have more fun things to do. I would recommend a Nintendo-branded Android tablet with subtle physical controls. Either that or something totally revolutionary - but that's easier said than done. In fact, I think this QOL product may in fact be a tablet. Iwata never said it was about exercise - it could be about mental QoL.
As far as the home console space, I think Nintendo would be wise to launch a premium system in the relative near term, within 2 years. They could price it a bit high as long as it was significantly more powerful than other systems in the market, and start sales slow. They could contract or buy a couple studios to make some high-end launch titles that gamers expect from such a system - a cool shooter, adventure title and an rpg, while still supporting the Wii U with internal resources. I expect Wii U to sell "OK" over the next couple years, but it's life is likely short whether Nintendo likes it or not, and they need to prepare for something fresh. They could also do well by launching soon and perhaps be the most powerful system on the market for 5 years or so.
