I really think this is their best option now, they're not going to get hardcore/casual-core type players this gen. Casuals are gone and Nintendo can't compete against the lifestyle functionality of a smartphone/tablet + 99 cent arcade style games. Wii Sports/Fit went out of style a while ago. 

Make a "Nintendo Universe" game. It doesn't even matter if it's not 100% finished by this fall, design the game so that it has different areas (Mario World, Zelda World, Kid Icarus World, Pikmin World, etc.) ... new "worlds" come online over time as new toys get released. Create an animated TV SHOW to go with the toy line for Nickeldeon or Disney Network. Basic premise: It's Subspace Emissary or the Infinity Gaunlet for the Nintendo mascot universe, some evil force is trying to destory "Nintendo Universe" or something, Nintendo heroes have to team up.

The system MUST be cheap, they have to figure out a way to bring production costs down. Either axe the Wii U tablet screen entirely (saving at least $40-$50 production cost), but *keep* the NFC chip in a new Pro Controller. OR make a much smaller Wii U controller with a smaller/cheaper screen (3.5-4 inches). The tablet as is is too big and clunky for kids anyway. 

Focus on making profit on the few "heavy hitter" Nintendo IP per year + release a steady flow of high profit margin toys. Get some third parties like Sega and Capcom to allow some characters in like Sonic and Megaman. 

Take aim at Skylanders/Disney Infinity and turn to push them out of the market with a better quality product + TV show. The only downside is Skylanders/DI don't require a new system to play ... so Nintendo has to get their pricing right. $249.99 w/Nintendo Universe + 3 starter figures is OK, but $199.99 would be far more ideal. 

This is a dangerous path Nintendo's taken, as of late. A bombardment of Mario, Zelda, Kirby & friends is what's put them between a rock and a hard place. The WiiU is an EXCELLENT gaming machine, that's not an issue in my opinion. As a matter of fact, Nintendo with the WiiU are in a better position to turn things around than Microsoft and the Xbox One. BUT...there has to be a culture change. They should've fired Iwata last year, when there were talks about it. Anyway, I don't think a new console and a bigger push towards kids will make them more profits. Just my humble opinion...

Oh boy.

This can be a great idea. A similar idea changed the North American games industry for the better with the NES. No reason why they can't do something similar with the Wii U. Their comments suggest that this is a more realistic possibility than many of us have previously considered.

However, there are points that you make that don't really make sense.

1. In relaunching the Wii U as a toy machine, they shouldn't actually make it a toy machine. That should just be a marketing tactic, just like it was with the NES. It will still make hardcore and casual games, but it should definitely be marketed as a toy machine for those who are none the wiser.

2. The tablet is not to. big and clunky for kids. It's not too big and clunky for anyone. If they want to cut the price, they'll find a way that makes sense.

3. That's not a sound strategy for a games only company like Nintendo. They need a steady stream of heavy hitters, not a few of them.

4. Trying to push Skylanders and Disney out of the market is the worst strategy for a TOY MACHINE. You didn't see Barbie trying to take down G.I. Joe, did you? That's the opposite of what they'd want to do. What they want is do gain exclusivity of Skylanders and Disney Infinity. They want it to be the only place to play your toys.

None of that sounds good to me. The only thing that would have saved the Wii U is a solid line up for this year which they have already screwed up.

What happened to MK8 in jan and bayonetta this spring? donkey kong was supposed to be out last year along with 3dworld. They have delayed their heavy hitters for too long and even though 3d world was a great game, they didn't deliver what a lot of people were really hoping for, an open world 3d mario game. Instead of having retro do metroid first and bring DKC when the insall base was already established, they let them do DKC. I really like DKC but it's not a system seller. If they would've had a new Metroid and Zelda U ready this year, Wii U would still have a chance.

Their biggest mistake was not making a low powered console,no. Their biggest mistake was not having games ready and delaying their best for way too long. 2014 was supposed to be a great year for Wii U, Nintendo is letting the console die. I am definitely convinced at this point they don't care for wii u.

I have been a big supporter of the console so far. Day one adopter and I expected as much for the first year, we're in year 2 and Nintendo just hasn't delivered and it looks like they won't. They don't know how to market the console in commercials, most have been horrible. I still love my Wii U, but Nintendo failed. The Wii U had the potential to succeed regardless of specs. But you can't have games released so far apart when you have close to no 3rd party support. And Nintendo seems more focused on 3ds than wii u.

Nintendo is failing with wii u and it makes me sad.

I thought that they were making another console anyway... Well 2 new consoles including the handheld.

maybe they are looking to have another console on the market geared toward the hardcore gamer and the wii u can be a sort of entry level console (for the kids)

Their best bet is two new Nintendo-made IPs - one to cater to casuals and bring them in, like the Wii IP did - and another to cater to the traditional videogamer market. One blue ocean, one red. Keeping the classic IPs flowing is good and keeps people happy, but there always needs to be something new to bring people in. Nintendoland does NOT count for either, btw.

I think I could agree with a smaller screen working well. I prefer the larger screen, but I can see others not so much, and I'd probably prefer having an option between the two.

It's too dangerous to wedge yourself into a niche demographic. That can succeed for a time, but what if the next generation, that demographic doesn't care to upgrade? If you've already settled into that image, you'll have a really hard time bringing in new people. The Wii was a one-hit-wonder - I doubt if the videogaming market will see another hit craze like that until at least the 10th gen.

Nope, Bayonetta, X all this stuff ... it's going to be hard for old Nintendo fans to hear this ... but these games ain't doing sh*t for the Wii U or Nintendo.

Wii U has no relevance to the mass market that might be interested in that type of game. They will all be on the PS4/X1 this generation.

Embrace the kid-image and profit off of it. Forget the Wii Party/Fit/ crap too ... casuals abandoned you, refocus on making sure this generation of kids at least grow up with Mario and try pushing new characters to a new generation like Kid Icarus and Star Fox. Kids today don't know these characters, its time to change that. Once kids get hooked on these characters, then they will buy games based around them, you need to popularize other characters other than just Mario + Pokemon. 

When the time is right, take the TV show and try and make a movie out of it (like the LEGO movie, which is huge).

25-40 year old Nintendo fans ... I'm sorry, but you guys just aren't a market Nintendo can run their business on. You are a small market that makes a lot of noise on the internet but doesn't actually back it up with sales numbers. They should be respectful to you, but they need to find new avenues of profit and fast.

A 25 million userbase can still be profitable for Nintendo if parents are having to buy their kids 10-20 little toys per household over 3-4 years (at a giant profit margin) on top of the usual Mario games. 

Relaunching a Console is always a fatal mistake, as we learned from Sega. Full on failure of the Wii U is still better than relaunching a new console.

It would be more like a PS3 type relaunch. 

Focus most of your marketing on this NFC toy line and keep updating it with new game content every 2-4 months. It should be an evolving "universe" that kids don't get bored of (but NOT a MMORPG). 

You want Nintendo to bet everything on what is possibly nothing more than a fad? With Activision releasing yearly installments of Skylanders, and Disney getting in with their properties, Nintendo joining in would just further suffocate the market. This whole NFC thing will eventually end up like the rhythm and fitness genres. It's not a good idea for Nintendo to bet their entire business model on it.