Nintendo's priority when raking in the Wii/DS money should have been building more robust and diverse first party studios. Nintendo platforms have lately suffered from a lack of worthwhile support. Wii had major problems, 3DS had problems and now Wii U has major problems.

To counter this, the logical solution is to make more games. The money was there, the ambition quite clearly wasnt.

I agree with this. Instead of buying whole development studios I would expand the existing ones. If Retro expanded and could produce a game a year instead of every 3 years it'd be great. 

This strategy along with funding games would work better. TW101 & Bayonetta 2 are good starts and hopefully more are on the way. Also, giving their IP's out like with Hyrule Warriors & Luigis Mansion works too.

A combination of the 3 would fix the issue.

I think they lost a great, great chance when not bidding for Atlus. Specially now that both companies seems in love. Atlus made so many great 3DS exclusive games and promotions lately, Nintendo should have bought it.

They should have bought Atlus when they had the chance. But on the bright side, that doesn't mean they can't have more 3rd party exclusives from them.

Since 3rd parties refuse to release their games on the Wii U i'd say yes, they definitely need more 1rst party studios and for a good reason: To avoid prolonged launch gaps.

 Why wouldn't they? Specially since  the Wii U is  not getting many 3rd party games . Nintendo needs to put as many quality games on the Wii U as possible so that gamers feel like their Wii U purchase was worth it.

Yes they should. They should use some of all that money they have to invest in several studio's. This should have been done 3 years ago to have games ready for the Wii U's launch. And to have a steady supply of games.

Should have done it 5-6 years ago but they probably thought the Wii Sports/Fit/Nintendogs gravy train would never end. 

It's too late now to have real impact on their existing hardware. You have to make these decisions years in advance. 

At the very least NST and Retro should have been expanded ages ago and a new Nintend studio in Europe should have been established years ago. 

They can't change the past, but they will change the present and make a brighter future. Nintendo already said they miscalculated the market and are going to make drastic changes to how the Wii U is marketed. Hopefully in 2018, the Nintendo Ultra won't suffer from the drought of games and "underpowered" statements.

I agree. Now is the time for them to double or more the number of studio's they have so they can have a steady stream of games.  I have all the trust in them that they will be on top of this.