Nintendo shouldn't release a new console earlier than PS5.

[Shiken]

Nintendo is in a rough spot. With an under powered console, they have two options. Release early with a slightly more powerful machine than PS4 or X1 just to try to get a jump on people who are eager for an upgrade at the time (we see how this worked with he original XBox and again with the WiiU). Or wait it out and continue to profit what they can through new software with the WiiU and try to Pull a Sony along side of the other consoles (Hardware and price advantage).

Either one of these will be hard for Nintendo because they will have to bring in a new gimmik to give it an identity separate from the competition (which can be very hit or miss), or win back third party support with option two. Third party support won't be hard to win back if many own the console, this is a proven fact. Consoles sold equals potential software sales, and none of the giants will be able to ignore sales across three platforms rather than two. The real challenge is winning the fanbase back, which at this point is easier said than done when you look at Nintendo console sales as a whole (excluding the Wii) and see that they have been on a decline since the Super Nintendo.

I think the best option for the WiiU is a combination of the two, a hybrid if you will. They need to lay low and wait it out while developing a gimmik for their console, and work on power and pricing. This way their first party will have features unique to the console for its already strong first party line up, and full functionality with multiplat games as well. I doubt price and power alone will save Nintendo next gen, they already did this with the GameCube and it failed compared to the competition. Nintendo can't survive off of gimmiks and 1st party alone either, we see that now with the WiiU. The only thing that will get the ahead next gen is being patient and putting ALL cards on the table while hoping for the best.