They don't have to be irrelevant in the console business. The Wii U's problems stem largely from poor and minimal marketing and a momentum-killing first year that had one of the worst droughts ever for a Nintendo system, with an 8-month gap between launch and Pikmin 3. Considering their reliance on first-party software that was not a good thing. Nintendo's problems with taking a leadership position in sales is largely due to them making hardware that third parties don't care to release their biggest and best games on. They hit it off with the Wii thanks to a relatively much lower price, slick marketing, a gimmick that resonated well with gamers, and just the right games it needed, but that's a nigh-impossible stunt to pull off twice. I still think a more conventional system could work for them.
I think Nintendo fans sometimes really understate the Wii U's problems. This isn't a "oh it just had a bad launch". The PS4/X1 didn't exactly have great software libraries from launch either, the difference is people actually wanted those systems. Pikmin 3 coming out 2-3 months earlier wouldn't have saved the Wii U.
Nintendo just made a system no one asked for. If they want to make a system third parties will develop for then they basically will have to swallow their pride and let third parties basically tell them which GPU/CPU/hardware features they want, something I think Nintendo is still too stubborn to do.
If they could release a Playstation 5 (as in FIVE, not FOUR) class system approved by 3rd parties and get a 1-2 year headstart, maybe they could gain some traction there, but I don't think they want to do this.
I don't think Nintendo has the capability to support two machines anymore. It's just blatantly obvious this generation. Having two distinct platforms especially with rising development costs (even for portables, the days when they could just port SNES games or use N64 level graphics are long over, handheld games require a lot of time and dev power now too) is an unworkable situation for Nintendo. Even Sony really can't make it work, they can't support the PS4 and Vita simultaneously, they basically need third parties to carry the Vita.
It's not 1989 anymore, it's not even 2006, supporting two hardware platforms today requires tremendously more resources.
