I think the major crisis for Nintendo in the west is this is the first generation where their youth strategy is really not working. Kids of the 80s, 90s and 00s in significant numbers have great nostalgia for Nintendo. Kids of the 10s are abandoning them for mobile devices.
Meanwhile Nintendo's relevance among core 16-35 demographic has been under siege since the PS1. The Wii showed Nintendo a blue ocean market of casual gamers, but these kind of people largely don't see the point in upgrading to a new device as they never cared about specs in the first place. Much like the kids, the grandparents and casuals have gone mobile where free or .99 games rule and can justify the purchase for other aspects (internet, office, etc.)
Nintendo is fighting a three front war (core, casuals and new generation) in the west and losing on all three. Sony seems to have just given up on handhelds and let Japanese third parties carry it focusing on the PS4 being a western minded system. Microsoft views Japan as a distant priority and has focused efforts on the west.
Honestly, I have no idea how Nintendo makes a comeback in the west. All I can think of is the Fusion concept so resources are pooled into one device rather than split between two. Even then not sure how power versus price would be balanced to make it appealing to consumers again.
