I agree that the holidays will give the Wii U a boost, but not enough of one. I figure with a price drop they'll be able to steal some potential sales from Sony and Microsoft. As a parent, a $299 price point with a packin game, is a lot more attractive than $400+.

The lineup won't change the long term fortunes of the Wii U, but the console will see a significant bump during the holiday quarter. The philosophy and strategy behind the Wii U is bad and the only way it could have worked (at least somewhat) is if third parties were supporting the system through its entire lifecycle.

In a way the Wii U seems like a concept that happydolphin came up with. The underlying premise is to combine red ocean and blue ocean strategies, but that's not possible, because these two things are mutually exclusive. Yet Nintendo attempted it anyway.

You know what the root cause of Nintendo's problems is? The belief that the Wii was a failure. That's what they believe, hence why they abandoned it so quickly. But what's worse is that they also believe that the GameCube only failed because of timing, branding and marketing. So Nintendo makes GameCube 2.0 and calls it the Wii U (Gamepad is the evolution of the GC-GBA connectivity), because the only good thing about the Wii to them was its strong brand. But at some point Nintendo has to realize how stupid they have become. That point should have been E3 where Iwata pointed out things like "Donkey Kong has fur.", "Bayonetta has new hair." and other ridiculous non-selling points. That's how bad the Wii U is, because about the only thing Nintendo can come up with boils down to "better graphics than the Wii".

As long as Nintendo's defintions for failure and success are so screwed up, they will create more failures. Maybe the failure of the Wii U gives them a much needed reality check, but it's just as possible that they will refuse to change their minds.

Yes, the red ocean was able to put up those kind of numbers. Just look at the competition which got gored: 10m DCs, 21m GCs, 24m Xboxes. Sega got forced out of the hardware business, GC and Xbox sales fell off a cliff by 2005. That's the appeal of red ocean strategies: If you are able to dominate, you roll in the money without having to think outside of the box. Naturally, it's much easier to create a sustaining product than conceiving a new product. In the case of the former you know that the market is there and you have a good idea of what it wants, in the case of the latter these things are unknown (there may be a market, but the size of it is a mystery).

Combining red ocean and blue ocean traits into one console isn't possible, because the blue ocean strategy is about creating value that differs from the existing red ocean products in the market. In the simplest terms, the PS3 and 360 prioritized the hardcore gamer while the Wii aimed to get as many people as possible to play, regardless of their experience with video games. The result were two high priced machines that emphasized graphics, singleplayer, online multiplayer and gritty games, and one low priced machine that emphasized accessibility, local multiplayer and playfulness. The question wasn't solely "PS3, 360 or Wii?" like it was in previous generations. Nintendo's approach also created the choice "Wii or nothing.", because they weren't in direct competition with Sony and Microsoft. Or to be more accurate, they weren't in symmetrical competition (which means to compete on the same set of values).

This allowed Nintendo to have high profit margins, because there was nothing else like them available. Meanwhile, Sony and Microsoft were bleeding a lot of money. That's the underlying premise of the blue ocean strategy: Profit margins in the red ocean (the known market) get ever slimmer, so companies are better off in creating a new market instead of commiting commercial suicide (which is what Sega did with the Dreamcast). You can't combine the same values as your competition with different values without creating either an overly expensive product or a product that lags behind in terms of red ocean values which makes the decision to go red ocean absolutely pointless. Either way, you end up with a mess.