I don't see it as black and white.

I think Nintendo can get 3rd party support with an appropriate console AND still cater to Nintendo core as well as expanded audience.

Maybe I'm being to rash on the price as to do that, yes price has to go up and people were willing to pay $400-$500 for a Wii at one point.

Your vision of another Wii will always end like Wii where it has no sustainment and even Nintendo walks away.

They need 3rd parties AND new IPs on their own plus their existing IPs. Wii was closest to having that but never got 3rd parties. Wii U started showing 3rd parties but left all the expanded stuff off and no new IPs, now 3rd parties are walking away as the expanded stuff is coming, so any rebound will be limited and short.

Nintendo needs a console:
$300-$400 that can relatively easily port from competitors machines so 3rd parties have low barrier of entry
Large Nintendo IPs at launch (at least 2)
NEW Nintendo IPs at launch for core and expanded
MANY 3rd party IPs to fill all other genres and grab core

That is how it needs to plan.

Gamepad + Wiimote + reg controller all need to exist too as they are great items with value and distinction in case of first two.

And all the while you are doing that, you begin to plan for the next generation and build strong launch games for an affordable system that launches in time for the holidays of 2017. What the big third party publishers demand won't matter one bit, because Nintendo can be successful without them. Nintendo needs to build a console that consumers want to buy (like the Wii) instead of a console that developers might want to develop for (like the Wii U). Also, it doesn't matter what Sony and Microsoft are doing at that point (2017). Since the industry doesn't want Nintendo, Nintendo is free to do what's best for them and best for their customers. Specs comparisons, what will the big third party publishers do, those are questions that have no relevance. Nintendo's success is not measured by what other companies do and say, but by what Nintendo's bottom line shows.

Cheaper hardware means that customers have to pay less. I don't know why you are under the illusion that third parties will definitely develop for Nintendo. It's not a matter of processing power and the like, just look at the recent examples of PSP+PSV multiplatform titles that skip the 3DS. Games like Toukiden and God Eater 2 aren't coming to the platform that hosts the #1 hunting game. The 3DS has the necessary power, it has the control scheme, it has the installed base and it also definitely has the userbase that would buy such games. Yet those games aren't coming. And this is on handhelds where the third party bias against Nintendo isn't nearly as strong as on home consoles.

A long lifecycle is not dependent on processing power, but commitment. The Gameboy was nine years old when Nintendo provided better hardware with the GBC, but even then almost all new games were still playable on the original GB. I am using the GB as an example, not just because it is a Nintendo system, but also because it was a system that was as primitive as it could get. On the other hand, any system that is released nowadays won't have consumers begging for more expensive hardware, because graphics have already hit a level where they are good enough forever.

I think power does have some impact on the lifecycle. If we look at the Wii U, we have a lot of people assuming they will support it for 3-4 more years before trying again. If the PS4 did this badly, I don't think people would make the same prediction. They would have more room to make changes, as it will decrease in price and effectively become a different product with a different audience. Consoles that start weak don't really have the extra chances a more expensive one has.

Umm i don't want to get into back and forth here. I mean you have your view of the situation and i respect that. The reason Wii U is not selling has nothing to do with power. This is the first time people are able to experience Nintendo games legally. So they have never looked this good as far as graphic fidelity is concerned but yet the sales are struggling. 

Also it is the one of the most "core" focused Nintendo home console they've ever made and the so called hardcore are no where to be found when it comes to buying the damn thing. They also often have complaints about motion controls. Heck i had blind dislike towards it last generation for stupid reasons but what is it this time. This is the most traditional "hardcore" focused controller Nintendo has ever made. It has two sticks (no wonky stick like Gamecube C stick) and rest of the buttons are exactly like what you'll find on the competition. Again, where are the hardcore gamers when they should be buying it. Sure there is a screen but you can easily ignore it if you don't like it and play the game like a regular ps360 game. 

People say they want certain things but never show up when. Now they demand more power and yet this is the most powerful, first HD console from Nintendo. Every single game looks visually phenominal beating from when i skepticism of the power when i bought the device. 

I kind of went on a tangent here but point stands. Power should and must not have an impact on a gaming device catered towards fun gameplay. This is not Crysis 3 where people just run benchmarks on pc and post that stuff on thread on internet or take 4K screenshots and salivate. Mass market and most gamers don't give a damn about that stuff more when 5 minutes of awe is over. 

It's more common than PSP+3DS or PSP+3DS+PSV. Indeed, there's no good explanation other than Sony paying for it. But since it's so obvious how little they care about the Vita, it's unlikely that they arranged deals. So what we are left with is no sound business reasoning at all.

Granted, for the Wii U third parties can come up with excuses, but if there are examples that the 3DS is skipped, then why should it be assumed that hardware parity would improve the Wii U's fortunes? Hardware parity would lead to a higher price of the console (with or without the Gamepad), thus the sales rate would be insufficient and third parties would still have an excuse. The result in terms of third party games would be roughly the same, in terms of financials it would be even worse than the Wii U for Nintendo.

When it comes to the Wii U's lifespan, there are also people like me who expect a five year lifecycle (with the fifth year being barren) not due to power, but because of sales. There's no point for a company to drag out a failed console any longer, because by the fifth year consumer interest will be at such low levels that there will be no backlash for launching new hardware.

If the PS4 did this badly, I wouldn't make the same prediction as for the Wii U. But once again not due to power, but because of third party support. The PS3 was a trainwreck, but third parties stuck with it despite losing hundreds of millions on it. At the beginning of the seventh generation there was a year where only Nintendo, Disney Interactive and, I think, Majesco posted profits. All other major publishers, as well as Sony and Microsoft, posted significant losses. But none of that led to changes in the way business was done, so the 360 and PS3 were the first consoles in history that could recover from really bad starts. All other expensive consoles that were launched in previous generations had their demise accelerated by their high initial launch prices. It's not processing power that leads to a turnaround, it's commitment by third parties; and that is something that Nintendo will not be able to count on, so aiming for hardware parity is suicidal. 

It's also worth mentioning that there was already a Nintendo console that had hardware parity in the current Nintendo+Sony+Microsoft mix: The GameCube. A failure that was quickly abandoned by third parties at a time when game development was cheaper than it is today. From 2004 onwards multiplatform development shifted from PS2+Xbox+GC to PS2+Xbox.

It's also worth mentioning that there was already a Nintendo console that had hardware parity in the current Nintendo+Sony+Microsoft mix: The GameCube. A failure that was quickly abandoned by third parties at a time when game development was cheaper than it is today. From 2004 onwards multiplatform development shifted from PS2+Xbox+GC to PS2+Xbox.

But WHY did it shift from GC?

Maybe because sales of it sucked and unlike MS, Nintendo wasn't pouring out money to keep titles coming. (additionally Xbox was akin to PC so easier dev cycle)

Had gamecube not been a purple lunchbox with limited cd storage, Nintendo would of sold more. Instead its own physical appearance and focus pushed this kiddy image that pushed away nonNintendo fans and 3rd parties simply had no financial reason to port to it.

Since SNES Nintendo has had specific actions that drove 3rd parties away, especially considering they had the very profitable PS 1 and 2 to focus on.

On Wii EVERYONE was taken off-gaurd. They assumed a weak hardware following the GC would be pointless to even consider. By the time they realized they were wrong, they had 10s of millions of dollars in game engines created for PS360 that they simply couldn't put the focus into something that would work really well on Wii. So they used PS2/Xbox upped engines for minimal cost and put out largely meh titles with the rare exception of of a few. We both know had the focused on a proper Wii engine for their big titles in 2007 or 2008 at latest, Wii would have continued well past 50% marketshare.

Wii U had some momentum and some token initial support and engines made were already being designed with very flexible scaling in mind to include its lower specs. You're right that EA is just EA and likely walked away when closed-door meetings failed to push Nintendo to the same DRM based approach the others have. However other 3rd parties were partly there and had Wii Us launch been better, we would have seen that blossom.

Regardless, I still think time will show me right if Wii U fails to do any this Nov/Dec. If they don't deliver ~4m in these two months, we'll see a 4year console at best for Nintendo.

Nintendo needs a $300-$400 console, that is not pushing the limits of power, but close enough to not really matter. It needs to be distinct and the gamepad/wiimote ideas do that along with Nintendo specific IPs. You are right, that they need to focus on building and widening their own genre portfolio and I like the idea above about buying more western devs, but that also needs to be followed up with them not being tightly controlled by Japan beyond quality control. 

Had Nintendo spent just $50 more in hardware costs with Wii U they would have been so close to Xbone now that it wouldn't had mattered for 3rd parties costs as well as still been profitable with at least  $50 lower price than PS4 with a packed in game. They could've kept the CPU, ungimped the memory speed and moved to 4GB of RAM plus a upgraded GPU. Still retained Backwards compatabilty, likley moved to a larger casing but that would actually be good as it wouldn't look so much like a Wii and helped create a new / different identity.

HOWEVER, I'm willing to agree the Wii path isn't horrible as it was still highly profitable for Nintendo throughout the entire life cycle. But I don't think a repeat of that would result in greater marketshare or even unit sales. Definitely not a 100m unit machine again.

Yeah, you should find an answer for why the GC sales sucked instead of parroting the nonsense you have heard. Simply put, the GC failed because it was the Nintendo version of the PlayStation (talking about the brand, not the PS1). A lame copycat, so people went for the real deal. Out of all the Nintendo consoles, the GC had the best multiplatform support, but at the same time it's the worst selling one. Looks like gettting third party support and being successful as a console manufacturer at the same time is at odds for Nintendo. Making a port machine like the GC didn't improve their fortunes. If the $200 version of the PlayStation failed to sell, then why should the $400 version of it succeed?

Why is there the belief that what works for Sony and Microsoft will work for Nintendo as well? After all, nobody believes that what works for Nintendo will work for Sony and Microsoft as well.