The Nintendo NX should be a handheld Wii U. This is what they should do:
1. Shrink existing Wii U chipset to 14nm.
2. Release it as a 6" 720p tablet with physical controls for $199. This tablet will be compatible with all Wii U titles that support off-TV play. Create a great web browser and work with third-party developers to port all the popular mobile apps and games so people can use it as their main tablet.
3. Create a $40 Chromecast-like accessory to stream it to the TV. This will provide support for the rest of the Wii U games that require a second screen.
This is the perfect strategy because:
1. Wii U goes from underpowered home console to the most powerful handheld available with AAA games.
2. Strong first party library from Day One and opportunity to generate more profit from Wii U games they've already spent a lot of money developing.
3. Replaces both Wii U and 3DS, no need for separate handheld/console development teams.
4. Replaces the need for a separate tablet for most consumers as long as basic apps are there (Facebook, Netflix, popular mobile games like Candy Crush, etc.)
5. Extends Wii U lifespan another 6 years.
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