Though I agree with most of this, there are lots of points that are ambiguous.

First of all, on a general look at Nintendo's vg history post NES, Nintendo has always had the issue of stealing the limelight from 3rd parties. It's not a novel issue. That's one thing cleared up.

In terms of profit/revenue, Nintendo has always had high returns off its software. The hardware that really helped Nintendo was its portable hardware, for that you're right. But in general its revenue came from software. Think of the profits made on a 40$ game where 30$ are cashed in by Nintendo, then it sells in the 10s, 20s of millions! Then multiply that by a number of blockbusters. Here they were for the Wii:

http://www.vgchartz.com/worldtotals.php?name=&publisher=&console=Wii&genre=&minSales=0&results=50&sort=Total

Here they are for the DS:

http://www.vgchartz.com/worldtotals.php?name=&publisher=&console=DS&genre=&minSales=0&results=50&sort=Total

If I see clearly, the Wii beat the DS on the software front this gen. So, in terms of the greater portion of profit (software), the home console actually beat the portable console this gen. So your point about "Nintendo's cash cow has always been and will always be its mobile division." didn't hold true this gen. As for previous gens yeah it did hold true. But the Wii's software performance is the reason for the boost in the graph our buddy brought up. Now you'll counter-argument with the software bundles, but that only accounts for a MAXIMUM 95million software units bundled over 418Million total sold (top 30). It still beats DS's 309Mil units of software. (Top 30s) Add to this that the console games have a higher markup and margin, and the point is really driven home.

As for Nintendo being a "burst" or "hot start" company, it wasn't always the case. The Game Boy lasted many many years, and the Game Boy color helped keep it alive. The NES was a 10-year console. Granted the strategy was, regrettably, different for the Wii. But it's not a Nintendo habit per se, if you know what I mean. To your advantage, I agree that Nintendo did a bad job at handling the lifeline of the Wii. The remodel sucked, and the new models for xbox and ps this gen really helped boost HW sales for both platforms. But then again, the attach ratio for HD consoles is lower YoY (not 100% sure), so can this really be considered total success on the HD side in all judgement?

Lastly, the Wii never lost the battle for the living room, since many people still watch Netflix on the Wii (guilty as charged), and some will still turn it on to play their games (guilty again). All in all I can't agree with the general sentiment of your post, but I do agree with sporadic points you make here and there.

I'm saying that the Wii lost the battle of the living room even thought they are the top selling system.  You are saying that the wii never lost the battle of the living room in that people use Netflix and play games still.  I'm saying that using Netflix to determine that is mute because I believe the company wont be around in two years and its experience is not unique.  Now you are saying Netflix is irrelevant?

No, it wasn't. There was also the GBA and of course, the PS2 had a much longer shelf life than the Gamecube, so it generated notably more profit in its lifetime than the GC. Furthermore, the PSP was sold at a hefty loss initially to buy Sony market share and take over the portable market. Sony barely made a profit in the PSP's first year on the market (2005). By the way, the graph shows the financial results up until December 31, 2010. So FY06 is showing the the PSP's early life, FY05 only includes the Japanese launch. The PS2 made a lot of profit (not as much as the Wii though), but Sony's financial results were dragged down a lot by the PSP and especially the PS3.

@amp316: That won't be the case anymore. FY12 was also in the black, but FY13 (which ends on March 31, 2012) is already guaranteed to go in the red, for the first time since Nintendo started making video games. The worrisome thing about the graph is that Sony and Microsoft kept improving (although Sony has been doing worse again lately with the strong yen) while Nintendo went down rapidly, because they gave up on the Wii. And looking at the graph it becomes even more obvious how idiotic that decision was. Of course, Nintendo suffers from the strong yen just like Sony, but going from $4 billion in profits to several hundred millions in the red within three years is a major collapse.

Well, that certainly could be the case, especially with the older casual gamers (which I completely ignored for that very reason) but I'm sure Nintendo didn't set out to make a console which was that forgetable. I really meant those kids around the age of 8 ~ 11, who in my opinion should not be playing GTAs or Batman to begin with. Also not every parent has the money to drop on two consoles. Hell, my parents did not gift me and siblings a console this gen. I actually got my PS3 in 2009 with my own money when I got a job. They were not entitled to buy it for us but it was something we really really wanted. Still, I never complained cause they had bought us a PS2 which was still up an running so I personally believe it's more of a rare case that a parent will buy two consoles (one for core games and one for casual games) than young Wii gamers becoming core gamers. I mean the Wii is economic, durable and has a lot of value to it and chances are that all the games bought weren't all shovelware (with some exceptions within the casual gamer demographic.) Motion controls were a means to grab tha casual audience because at the end of the day, most casual gamers don't give a crap about the line up of an upcoming console. They don't do the reasearch, other than maybe parents looking out for violent video games.

Let me rephrase that statement; "we can assume that a good amount of the younger casual gamers will grow to become core gamers"

Well, too be fair. Is that really Ninty's fault? Its not like they JUST made Wiithis and that. They did also make games that were more traditional of what they usually did. Metriod Prime 3, the Marios, DKCR, S&P2 etc. Yeah im still baffled that with didnt see a proper followup to Mario Golf or Tennis, but hell. Look how long Metroid went without a console release. And you can blame them for maybe pushing the whole "casual" thing to the forefront, but it wasnt like they could push the hardcore thing. WIth what?? How could they mess with SOny or MS in that category?? Their online was and is still much worse than the other two and the hardware is much weaker than the other two and the "hardcore" library is weaker. With that competition I think NOT targeting the hardcore was smart. If you cant beat em, do something else.

Even if you were to blame 3rd parties, and even if 3rd parties put gimped versions of whatever game Wii fans call foul about. It would still not sell or be as good as the HD version, because people would know its the worst one.