No.1 might be a bit unreasonable unless they have some kind of genius gadget/gimmick to drive hardware sales and the R&D can't just whip those up like they're cooking dinner.
But there's nothing wrong with a solid no.2 ... they could have been an OK no.2 this generation with 40-50 million units sold and turned a pretty profit especially with XBox One's weaknesses, but they were too slow, too conservative, and made a console too tailored to the tastes of Japan first (off-TV play as the main selling point to counter people who were playing handhelds more at home IMO).
If they had even just called the thing Super Wii, launched in 2011 (a full two year head start), and just threw a modified 4850 GPU in there (so it would be easy to port Western PC games to at a noticably higher quality than the PS3/360), made the tablet pad an optional accessorie (ala the Wii Fit Balance Board) ... they'd be in an OK spot right now.
They waited too long to make a new console and bet on the wrong gimmick.
