They should do blue ocean strategy

I dont think Nintendo should focus on winning, they should focus on making profits and ensuring the install base is large enough for their ip to sell well on. Nintendo hasnt had the mainstream core gamer in about 20 years so It will be Incredibly difficult for 3rd parties to support them and even If they do their games arent likely to sell well. They also cant rely on casuals In the home or handheld markets anymore making Nintendo devices somewhat of a niche product.

Nintendo needs to make affordable hardware sold at a profit with a steady stream of high quality exclusive games. 3DS was priced too high at launch and after the price cut was sold at a loss for about a year while Wii U was the highest priced Nintendo console ever and still sold at a loss for over a year, Nintendo cant make foolish mistakes like that again next gen. $199 should be the aim for launch price and sold at a profit.

Nintendo is also known for having droughts in between big releases due to lack of third party support, especially now with HD development taking much longer. They need to become more self sufficient and they can do this by unifying the handhand and home consoles.

The next handheld and home console should have the same or very similar hardware that play all the same games. In theory this will cause R&D costs to be down and they can make more new ip and revive old ip more easily since they wont have to make 2 seperate entries of each franchise anymore. Also this will give Nintendo's home console all the Japenese third party support that their handhelds are use to getting.

The hardware will be slighty more powerful than Wii U, similar to the jump from GC to Wii since most Nintendo games have no need to look any better than that and its a sizeable jump from the handheld point of view. Each sold for $199 at a profit. In this scenario even if the home version sells 15m and the portable version 35m thats still a total of 50m which is fine since they are both sold at a profit and thats more than enough to for Nintendo ip to be multimillion sellers.

A console on par with PS5 and XB3.
Better 3rd party support.
Strong 1st and 2nd party support at launch window.
New IPs that attract a more diverse user base.
New traditional controller that is compatible with the Gamepad, which should be sold separately or with a bundled game, and better battery charge than the Wii U Pro Controller (if that's even possible).

and whose fault is that? and to be fair Ninty has their loyal fanbase it just might not be as big as the other two's

They should look at the WiiU, and basically just do the opposite of that.

no stupid gimmick like an overpriced gamepad, put that money towards some CPU/GPU and ram power. some achievement system would be nice as well. but have the ability to turn them off for the party poopers.

Thats it? More power and achievements will cause Nintendo to win the generation?

Relevant hardware
3rd parties
More diverse 1st party games.

better than what i have seen so far.

-Arriving before PS5/ Xbox Next ( spring 2017)
-Serious Rebranding- (new name) they need to harken back to the N64 days.
-Having All the 3rd party support
-Having superior versions of PS4/XO cross gen games just as the PS4/XO have had in the last 6months.
-Impressive exclusives in the launch Window. 
-Impressive Hardware (at least 4x PS4/XO)
-$399