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pokoko said:

There is nothing wrong with niche, you hipster.  Low tier Japanese developers do quite well with niche.  The key is to make a profit on all aspects of your business, as you can't depend on volume to push your bottom line.  That's where the Wii U fails.

The Wii is an anomaly.  Let's throw it out because those results weren't going to happen again no matter what Nintendo did.

Now, the question is, without the fad factor of the Wii, what is your realistic baseline without third-party games?  The consumer base is more fragmented in terms of taste than ever before.  People want a variety of genres and types to pick from.  Nintendo lacks that.  Instead, they concentrate on a few kinds of games.  This reduces their potential sales by a significant margin.  This is their starting point.  The potential audience of a typical Nintendo home console is automatically smaller than with Playstation or Xbox.

And, quite honestly, that's not so bad.  The fact that the genres they specialize in don't need a lot of horsepower is to their advantage.  They can potentially create a low cost system where the games are the main selling point and where they achieve a profit from day one.  The target demographics won't just be families, children, and hardcore Nintendo fans, it will also be everyone who can afford a second console.  Make everyone want your console because of the games and make your console cheap enough that they can justify the expense.

With such a strategy, I think they could hit a baseline higher than the Wii U but with a lot less cost.  Seriously, Nintendo, it's time to ban expensive hardware gimmicks.

The hard part will be convincing the Nintendo faithful that they don't have to "win" the console war.  That entire mentality needs to be erased.

That's one path Nintendo has open to them and I really don't think it would be a bad path at all.  The other path would be to offer improvements across the board and compete directly with Playstation and Xbox.  There is potential in that and they have the capital to possibly pull it off.  However, the one thing they cannot do is this halfway bullshit.  Either go niche or go all the way.  It's an absolute waste of time and money to attempt to compete with Playstation and Xbox when you're still bringing up the rear in terms of power and commitment.

The impression that I mainly get from Nintendo is that management is so far removed from gaming consumers that they're just throwing darts at the wall and hoping they hit something that works.  That needs to change.

There is something wrong with niche as volume does matter in business. Stockholders are antsy and don't like it when their invested money is losing. If Nintendo can convince their stockholders that they'll only win in the handheld sector anymore, then it could work. But that's a very weak 'could', and losing all the time does not make for a good company strategy no matter how much money they could make.

However, I agree that Nintendo needs to leave behind a mindset of making a console to win. The Wii was a last resort and was completely odd-ball, at the time. Though, it had solid research. The Wii U is half-baked and way too pricey. Another thing I agree with you on, Nintendo needs to keep it budget and focus on the games instead of purposefully seeking out another Wii. If it comes and makes sense, it'll happen. If it's forced, it'll be another Wii U.