If it can sell 15-20 million in Japan, it will get a ton of Japanese support and all Nintendo support concentrated on one platform plus probably Android apps and lots of indie games.
That's enough software support.
Nintendo is never going to win with the Western "dudebros" crowd, they are set with Sony or Microsoft and that's that, the only way they would get this audience's attention is with an 8 TFLOP machine, which would be the size of a PC and a power brick the size of the Wii U console with a $600 price point.
They'd have to go to ridiculous extremes, they are not getting the GTA/Calladooty crowd, too late for that, the GameCube era basically decided that. Once MS decided they had nothing better to do than to waddle into another industry and just basically take up space like a fat soccer mom in an elevator, there wasn't room left for Nintendo to engage that same market.
Nintendo maaaaybe had a window of oppurtunity if it was just the PS4 and XB1, but now with Neo/Scorpio clogging up the market, nope. This direction will work better for them at least this is something different and it can dominate the Japanese market and do OK in the West/Europe.
