Nintendo doesn't need a blue ocean. The blue ocean of the Wii/DS is actually the reddest ocean today, there are more games aimed at casual/fringe players being made today and more money spend marketing those games than traditional games today. Clash of Clans has a bigger marketing budget than any console game.
You can't compete with free. It's a killer app and none of those people give a shit about buttons. You're not going to win them over "free" with "buttons". That's the naive mom who thinks she's going to win over kids with raisins instead of Halloween candy. They probably even prefer no buttons because it forces smartphone devs to make simpler interfaces that are easier to pick and play. You can't compete with that.
Switch can go the other way though and create a premium high end experience that's never really been available before in portable gaming like this. Switch is unique by its very form factor and usability, it doesn't need all that other gimmicky crap.
So much is made of HARDWARE sales too ... what about SOFTWARE sales guys? Do you know the GameCube has the highest tie ratio of any Nintendo system? Not DS, not Wii, not NES, but the fucking GameCube at a whopping 9.6 games per console. What if they could replicate a more GameCube like attach rate, but get a hardware base more along the lines of 3DS?
If Nintendo can sell 70-75 million Switches even with a tie ratio of even 8 games per console (lower than GameCube) 560-600 million software titles sold, that's more than Wii U + 3DS combined by a mile, they will make a shit ton of money from that system.
Maybe Nintendo should aim for that instead. Hardware is only there to drive software sales, how easily we forget this.
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