I'd suggest that the Wii U was a good idea terribly implemented, but it amounts to the same thing. The core questions behind Wii U's design is "how can we appeal to the core further while maintaining the expanded audience?" Good questions to ask. Nintendo's answers, or their attempt to implement them (clearly Wii U's outcome is different from their intent, with that 3rd party push we saw at E3 2011 which had evaporated 1 year later, still before launch) were what failed.

First Nintendo needs to re-awaken to their strengths which they remembered in the Wii era and have since forgotten. Then they can start taking a critical look at where they need to move beyond their core strengths again.

The question is if third parties will ever bother to meet them halfway. We saw outreach before the Wii U came out, and then the system arrived and aside from the wave of launch games, support is worse than ever.

I think the main issue here is the fact that Nintendo don't seem to make any serious attempts to get 3rd party support. They just assume that 3rd party will just jump on board their console for miraculous reasons, even when they provide very little to no support to 3rd parties.

We see that both Sony and MS go out of their ways to help advertise and even fund many 3rd party titles in various ways. In fact we've come to the point where 3rd parties have a big say in shaping home consoles as well, as seen by the design and support for the PS4.

Nintendo on the other hand isn't even remotely close to building such relationships with a lot of 3rd parties.

I agree with everyone who says they need a steady stream of compelling software. To my mind, all else will follow.

The question then is; how do they achieve a steady stream of compelling software?

1) Buy up successful studios with all their hoards of monies
2) Combine their successful HH market, with their struggling console one: Nintendo Fusion

These two steps would transform Nintendo into something unstoppable.

QoL then becomes an Iwata-san vanity

Release system with 2.5D Super Mario Bros. packed in.
Have a triple-A title released at launch (3D Mario, Zelda, etc.)
Design a system easily accessible to non-first party developers.
Large marketing campaign that doesn't highlight "family".

Hire Reggie Fils-Aime to be CEO of NOA. Hire a European to be CEO of NOE. Demote or fire Iwata. Promote a fresher face to be president like Masakiro Sakurai or Eiji Aonuma.

Purchase and create a bunch of new western development studios to create new hardcore western IP's. Buy Capcom. Bring back the Nintendo Seal of Quality and enforce it. Improve the online infer structure with modern standards.

It's a chicken-or-egg problem, though. Nintendo also funds third party titles which they feel are worth funding (three-game deal with Sega on Sonic, or their alleged Monster Hunter moneyhat), but how many third parties have even come to Nintendo with games that are worth funding? Hell, Ninty gave money for Ninja Gaiden 3 (not that i'm complaining, as i rather liked Razor's Edge), a game widely reviled. To get top-billing for the games that are "worth" it (like, say, Assassin's Creed), Nintendo would have to really ante up, beyond whatever Sony's offering, and Ubisoft would have to see the value in that.

Nintendo released a lot of high quality 1st party titles for the Gamecube, but it still didn't help sell the console. The only difference I can see with the Wii was that it had some key motion control games like Wii Sports that sold the console to a completely different audience than the one who would be interested in the "compelling software" we like to play from Nintendo.

Shibata seems to do a good enough job with NoE. I agree that NoA needs more latitude, though, Howard Lincoln did a lot of good for Nintendo which was largely overlooked (in terms of how significant it was).

I still don't see the need to fire Iwata. Sakurai's not going to want to touch executive status with a nine-foot pole. There's a reason he left HAL. Iwata's potential replacements are all going to think the same as him, as far as we know. Any different thinking they could have would be inspired by the mere fact that Iwata got fired, not because they think differently than he does.

I rather like Takashi Tezuka, instead. Promote him and (empowered NoA prez) Reggie to the board.

-Make New Ip's that are treated equally as their already existing ip's.  People want more than mario.

-Listen to fans and bring back some of your core games instead of only focusing on mario

-Stop acting like their games are the only ones that matters.  Third Party games are a staple in the industry so listen to them.

-Make equivelent hardware as XBO/PS4

-Stop with the casual focus. Hardcore will stay, casuals wont

-Dont put all your focus on doing platformers all the time.  Gaming has changed a lot since the 90's

-Make a better online network.  Miiverse was a good idea but too heavily controlled and Nintendo still wont take advantage of online.  Just look at NSMB and SUper Mario 3D World.  Two games that could of had good online but they said screw you.

-Actually show up to e3.  THis is where the media is, not Nintendo direct.

-Focus on their message rather than saying Please understand

-Present themselves as people instead of the awkward showing we get at Nintendo Directs.

Now i dont know if Nintendo will ever outsell its competitors or not but these are things that must be done to at least stay competitive.  Just because you dont outsale everything doesnt mean you cant be successful.