I don't believe the handheld market is a lost cause, the 3DS will still manage to reach 60m units even if it had a very bad start, it is a very dated hardware, it wasn't very innovative to begin with (it's basically a DS with 3D and an analog stick), after 2013 1st party support for the console has been quite weak.
I think Nintendo should go back to make a more immediate a simple design, also they should use a modular architecture to upgrade their consoles more frequently.







