It was a great strategy! The current strategy of going after the "hardcore" market is bad. People say this nonsense that Nintendo lost its "core" fans with the Wii - but in reality the Wii had the highest selling core games of any Nintendo console. 3D Mario was more popular than ever, Smash as well. Mario Kart is loved by hardcore Nintendo fans and sales of that franchise exploded. The Wii had the highest selling Zelda game of all time.
Resident Evil, Okami, Mad World, EA Sports games, Little King's Story, Rayman, etc. The Wii had way better third party support than the Wii U does. It had more hardcore games than the Wii U by a landslide. The Wii was the best thing Nintendo could've done but after a few years of success they decided to put out low quality games. n 2008 Animal Crossing was lazy and Wii Music sucked. Then later we got sequels (Mario Galaxy 2), flat out bad games (Other M...), Nintendo decided to focus on 3D gaming on the 3DS (and we all remember how that one turned out at first, right?) and feed the mass market cheap stuff like Kirby. Each successive year Nintendo's software output for the mass market went down in quality. And guess what? Customers left! The mass market is intelligent. These people don't buy games based on hype.
The simple story is that going after the mass market with the Wii and the DS (and with the NES and Gameboy) made Nintendo one of the fastest growing companies on this planet. Leaving that mass market behind to concentrate on the lower quality games they put out right now stopped their success.
Oh and for the Wii tarnishing their image - it did the opposite. Outside of hardcore gamer circles the Wii and DS made Nintendo a much more liked company. Going back to the hardcore gamers is what is hurting their reputation in the real world right now.
