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Soundwave said:

To some degree Nintendo's always going to have demographic issues when it comes to third party content, because all of the major third party content that's significant and that even "Nintendo fans" clamour for ("aw c'mon Ubi Soft don't give us this mini-game shit, we want the big franchises!") tend to be violent action games or sports games.

And this is a problem because Nintendo's family friendly/kids image and the way in which they make their hardware and market it is usually for kids-first (not kids-only, but definitely family-first/kids first).

And that alienates the audience base for these types of games, hence Nintendo has problems selling to this demographic.

Even on the Wii where they had a massive userbase, the "non-family" Nintendo titles like Metroid Prime 3, Xenoblade, Sin & Punishment, The Last Story, (and now Bayonetta 2 on the Wii U) ... none of these games really sold any better than they would have on the GameCube. Probably less actually.

How you solve this problem I'm not sure, Nintendo has problems here, hardware is definitely one huge issue, but demographics are another.

They have not had a huge hit that wasn't a family-centric franchise since GoldenEye in 1997. After the N64-era they allowed themselves to be cornered into that "kids console" stereotype more easily and backed away from a lot of the good initiatives NOA had going in the 90s. 

Yeah, if Nintendo is going to continue to pigeon-hole themselves into a kid-friendly niche (when kids don't want to play kid-friendly games) and continue to have their hardware sales decline as a result then they might as well be 3rd party developers because they'll end up cornering themselves into a SEGA situation where their only audience left will be die-hard Nintendo fans.  It's one of the things that frustrates me so much about NOA in particular because they do next to nothing to push any of their non-kid friendly titles and basically throw them out there to die with the exception of Metroid because NOJ would probably fire people for trying to do that.  It's gotten especially worse since the Wii-era because NOA probably thought they could just depend on their newly found casual market along with the the kids market in the west but that blew up in their face.  I just hope that the failure of the Wii U, the exodus of the casual crowd and the declining sales of the 3DS has finally made them get it through their heads that they have to make a sincere effort to diversify their library -- in both genre and age demographics -- and to finally attempt to make a couple of games that try to appeal to the west first instead of their Japan-first mentality they typically have.  I'm not talking about throwing one or two T or M-rated titles out there and calling it a day like they do every gen -- they have to do their best to come out with a genuine hit IP that appeals to grown-ups and to try more than once before saying 'screw it' and going back to making Mario, Zelda, Pokemon and Kirby spin-offs like they do every gen. 

And for godsake, I hope that their next non-kid friendly game isn't a niche title that they know won't have universal appeal like Eternal Darkness, Geist, Hotel Dusk,  Sin and Punishment or a Fatal Frame sequel.  Hell, for all the praise the Prime games get, even that series is somewhat niche.