To be honest how is Nintendo even going to justify another "big box" console?

If their next machine is basically just a slightly better PS4, by 2017, more than 70 million people will own a PS4 or X1.

The Nintendo machine will just end up being a Wii U-2 in this scenario ... too little, too late with not as many games and will largely be ignored by third parties.

A handheld platform that has "console quality" (by console quality I mean like adequete PS3/360 level 3D visuals with some fancy lighting/shader effects thrown in and 1GB+ of RAM) which can be played primarily on the road but also on your home TV is less of a dead end for Nintendo. At least something like that could be reasonably successful.

Console by far. Anything they can put into handheld could be 2x better on console, without the infamous 3D which I love. I think, given from my Wii U experience, we'll be able to see more features in consoles than a handheld.

However, Nintendo would demolish sales in the handheld industry as proven today.

Console, how is this even a question.

I don't think Nintendo honestly has much interest in graphics beyond the Wii U to be honest.

All you get really by making the jump to PS4 is prettier graphics, but that causes game development to cost more, which is a no-no at Nintendo and their more cartoony style of graphics looks more than fine on the Wii U.

So if handheld chips are closing the gap to Wii U level performance ... then really, what is left on the console side for Nintendo?

Their consoles don't sell, and they have no play on the console market unless they make a new console comparable to the the Playstation 5 (not PS4 ... by the time a "Nintendo PS4" comes out, no one will care but Nintendo fans, which is basically just another Wii U-2 scenario for them).

I think there needs to be an evolution for handhelds in order to continue to live in this market; you either adapt or perish. To answer to question, I'd still say handheld. It's where Nintendo finds the most success, and I prefer nintendo handhelds to their home console.

Console cause the controls are way more comfortable

Fusion console!

I really don't get this impression that handhelds are dying. Both the console and handheld markets have stiffer competition than ever from PC and smartphones, but competition means the market is healthy, not that its dying.

That said, HANDHELD is the way to go. To do otherwise would be suicide.

Nintendo has a stranglehold on the AA game market with their handhelds. Games on small budgets have four choices:

1. Launch on consoles, where you must promote like crazy and have high production values to swim with the big fish IPs.
2. Launch on Steam, where exabytes of content will drown your product out.
3. Launch on Smartphones, which have terrible inputs, listless customers, and an unspoken $0.99 price point expectation.
4. Launch on a Nintendo Handheld, where there's not a lot of competition and people expect polish, but not high production values.

While the AAA market usually commands the most media attention, it seldom actually commands the marketplace hardware sales. Both the PS2 and DS sold on their AA game libraries as much or more than their AAA blockbusters. Handhelds are where the AA market is these days, and currently it is locked into the Nintendo handhelds. DO NOT DITCH THIS MARKET FOR ANYTHING.

Nintendo has really built themselves the perfect reputation to cater to the AA market, and as most of us are expecting the AAA market to crash eventually, they're really in a good situation. IF they can capitalize on it.

The rise of the mobile GPU makes this is a bit of a moot issue 

Even if Nvidia is over-specing here, by 2016 a GPU that outperforms the XBox 360 comfortably will be available, heck, that may even open the door PS4 down ports for certain types of games. 

Nintendo should copy Sony like they did with the PSP Go if Nintendo could only make one console.