My Response to Patcher's Comments:
On Iwata:
I think Iwata is the best guy right now and for the most part his track record is good, a management change at this critical time could be very bad for the company. With that being said he needs to step up his game and he needs to stop making stupid promises to investors (like promising 1 billion yen profit when your home console just lost momentum two months ago and you are selling it at a loss) which hindered his ability to effectively price and market the product to get it into homes (which is one of your first goals during any hardware or in this case platform transition).
On mobile platforms and Nintendo:
Patcher does have a point about releasing old titles on smart devices. One thing is that there are many people running emulators on these platforms to play Nintendo games so there is a potential market out there for VC titles. Of course, on the other hand, the level of experience on these devices is not very good due to the lack buttons which in certain cases can frustrate users and hurt Nintendo. Moreover, the piracy on these devices does show there is a market, but Nintendo has very little control over piracy after it enters these markets which will hurt its potential sales of titles.
I personally think Nintendo should create its own smart handheld console and offer both a regular wi-fi version at below $200 and an unlocked mobile phone version below $250; I can see something like that being very popular with students, parents who looking to purchase their children a first smart device. Of course such a device needs to be developer friendly, it has to be able to do certain non-gaming functionality a lot better, and it should adopt some of the standards that are in the industry right now like a capacitive touchscreen at least for the top-screen, more flexible eShop and accounts policy, and backwards compatibility. Nintendo already a pretty good split architecture with the 3DS (one processor core and a portion of ram dedicated to background processes and notification services; while the other processor and the rest of the ram is dedicated to game software), Nintendo should extend this further (which again should not be too difficult because newer ARM processors that are capable of doing more intense multitasking have dropped in price, like the Cortex A9, A12 &A7 Big.Little combo; and mobile low powered memory has also dropped in price since the 3DS's launch); they can also implement multitasking through mostly app-suspension (like done in most apps in iOS and Windows 8) with critical networked apps having the ability to get notifications through a single process in the background (again 3DS has that through the StreetPass and SpotPass service, they just need to extend it further) in order to reduce battery consumption and gameplay performance.
On Wii U:
As for Wii U, if it continues to sell at the price it is at right now, I do not doubt that it will have the same problem in 2014 as it did in 2013 no matter what titles come out for the system. Yes I think 2014 will be a better year regardless and sales will be higher because they will not have the huge software drought that plagued the system in first half of 2013. However, what the sales of Super Mario 3D World, and the overall sales of the system this holiday and the increase of sales after the price cut is that there appears to be people who are interested in the system but the price is still too high (and to be fair it is a solid system with a unique advantage both in terms of business and for customers). Nintendo could at the very very least be able to attract their fanbase to the system if they cut the price (I personally think it will go above just fans). I feel a price caught to around $200 would give them the greatest chance of growing their install base and it would allow them to sufficiently compete with the other two big consoles. Of course, cutting the price will generate a loss on hardware so Nintendo has to work to improve its manufacturing process. For one thing, I feel $70-$90 to manufacture the Gamepad is too much. However, it occurred to me that Nintendo is using a full sized screen with the resistive sensors on the full thing in the 2DS; this screen is smaller than the regular Gamepad screen but if all of it is used it could output the same resolution as the Gamepad. Using the same screen on the Gamepad and 2DS would help reduce some of the manufacturing cost because you are now outputting the screen on more than one device. Furthermore, the reduction in size of the screen could indicate that Nintendo is working on a smaller Gamepad, which will again help with saving costs (as well as addressing the issue that some people have with the Gamepad being too large) and it could also make a second Gamepad more affordable in the future when they decide to sell that separately (the screen is an important focus because it is one of the most expensive single components of the entire Wii U; also I think Nintendo created the 2DS with the single screen for this purpose, or else they could have saved money and made smaller panels). Also, I think Nintendo would also be wise to dump the entire shiny plastic thing they are going for with the Wii U and return back to matte because not only does it not get fingerprint and smudges stuck on it but also it is less expensive because it requires less buffing.
On the comments that the future will only be incremental:
I have to disagree with Patcher that this console generation will be the last for Sony and Microsoft as they will only make incremental updates. Certainty, I believe both companies will stick with the X86 architecture in the future because third-party devs will have an easier time to port software between. Thus, I agree that the future for these two consoles will be more incremental in terms of technology. However, there will still be a generational gap between these consoles because as specs become better and games start using the better specs. Moreover, there are still many unexplored gameplay styles that hardware manufacturers like Sony, Nintendo, Microsoft, and others can build around, and these will make the greatest impact if they are shipped as a part of a platform refresh because that will help them avoid fragmentation (also we see smartphones and other gadgets that are just incrementally updated and yet they are still considered to be a new generation simply because they are adding new things to the platform).
On PC gaming:
I agree with Patcher that this will increase (it has been doing so for a while now). With platforms like Steam (which offer immense value) and future Steam Machines as well as the PC architecture used in two of the three next-gen consoles, I can see that more software support (especially from third-parties will arrive on the platform). Moreover, the decreasing cost of PC hardware that allows for an increasingly acceptable gaming experience will further drive this forward. I suspect that with this generation, the number of third-party games (especially competitive online games) purchased on the PC to grow significantly.