Hardware needs to be more competitive. Wii U at its price is not competitive, neither is 3DS. Considering that they'll want both to share architectures, either they'll both be very gimmicky, or both will have minimal gimmicks. Luckily, graphics technology is advancing at a rapid pace, so Nintendo could do something better than the position they were in as they developed Wii U. Ditch PowerPC and Backwards Compatibility for Wii U, that's not important now. Use an 8 core ARMv8-A CPU (preferably Cortex A-57, but it'll probably be an A-53 unfortunately) 2-3 TF GPU from AMD, 12GB RAM (maybe some of their games will be small enough with their impressive compression technology that they could load entire games on the RAM), 64MB of embedded SRAM (eDRAM may not be feasible, and they really like having off-side fast memory, so let's assume they'll have that). 2-3 TF may not be a huge jump from PS4, but it'll likely be a more modern architecture, so it'll also be more efficient, and more capable. The handheld should sport a downclocked console CPU, with 4 cores instead (same architecture), a GPU based on the same architecture, less power, but designed for a mobile device (like many of AMD's "M" series mobile GPU), 2GB of RAM (from DSi to 3DS was from 16MB to 128MB, so if we use that pattern, it'll be 8 times the previous updated model, New 3DS has 256MB, so 2GB minimum is what we could expect.) Maybe more if they use different kind of RAM (LPDDR4 maybe?).
Regarding software,I still feel that missing out on each system having its own Mario Kart, Super Mario 3D et, will drastically reduce their revenues not just on software, but hardware as well. Having the EXACT same game run on both devices will not be as good as having separate games tailored to each system. Just look at Smash Bros, although the 3DS version will be the biggest seller, the Wii U one is selling pretty well for a game on a life-support system. Do people honestly think that having one Smash Bros. 4 would have given them the same profit as having two separate ones? They'd be missing out on the double-dippers, since it's likely that most Smash Bros. Wii U owners have the 3DS game. If anything Smash Bros. 4 is the way to go with software on their next systems. Otherwise, if you had either the handheld or console, what would be the incentive in buying the one you don't own? Fans will buy both, but the rest of the people wont follow suit as easily, each needs to have a good reason to buy, and having games the other system doesn't have is the beat thing they can do. Still have Mario Kart 9 on both, each with its own courses, its own exclusive modes and content, but also have exclusive games tailored to each console. Super Mario 4D Land for 4DS, Super Mario Universe for Nintendo GX (yes, the name of GameCube and Wii's API...maybe will launch with a successor to F-Zero GX ;) ). They can share assets of each other to make development much easier and faster. But don't make it so Mario Kart and such run on both systems and are released at the same time, with the exact same content, thats not a good idea. Different content, different appeals, etc. Plus, it'll give them time to make other games as well, since they'll be sharing assets between then.
