^ I don't think they will go from one side of the spectrum to the other, but it's important that it starts.
Changes are easier to happen when things go downhill, then someone takes the blame for their decisions and shareholders need to be answered to.

After the initial failure of 3DS and now the Wii U, even the most conservative ones must realize that they are not on the path to growth.

Nintendo needs to take more risks and needs to get out of all of the tradition crap or else they'll be left behind in the console war. Great read btw.

Nintendo isn't just a conservative company, they're hyper conservative even by Japanese standards. Apparently being Kyoto based is a part of this. 

I don't think things will change that much. Nintendo was far more progressive in the 90s, because Yamauchi would often make decisions without really caring about the input of others on the board. Like he basically bought the Seattle Mariners because Arakawa and Lincoln talked him into it, I'm sure others at NCL were wary of the decision to invest in an American pro baseball team. The funny thing is Yamauchi owned the team and never even went to see one game. 

I would probably guess today things like Donkey Kong Country, the investment in Rareware, the investment to open Retro Studios (something Howard Lincoln pushed for), the deal for Star Wars games, etc. would not happen, one of the Japanese old farts on the board would make a stink about it and it would get shot down, whereas in the past, Yamauchi just did whatever the heck he wanted if he felt so inclined. He gave Lincoln and Arakawa a lot of leeway, they would not get that today, they'd be glorified puppets like Reggie is. 

Whether its a cultural thing or not, this is the main problem at Nintendo:

Iwata - "Nintendo is not good at competing so we always have to challenge [the status quo] by making something new, rather than competing in an existing market.”

Too non-confrontational and runs away from its issues, rather than attack to fix its own weaknesses.

When things got too crowded in the western market with the M$ invasion, Nintendo aimed at casuals. Now that the casual market is flooded, expect Ninty to run away once again. Which direction do they turn to? Don't expect for Nintendo to "learn its lesson(s)" because remember, they run from problems. Right now is panic mode and its why most of us expect Nintendo to support itself, with the Fusion concept. Don't expect a powerhouse console, and don't expect "wii 3" those days are long gone.

Its nice to have some 3rd party stuff, but Nintendo should just spend money on their own games. They make the best 1st party games.

Yeah that quote was rather damning but very insightful about how Nintendo actually views the market (versus their fanbase). 

Nintendo tucks tail and runs away any time they are confronted with a strong competitor in any market sector. 

I don't think things are that bad within Nintendo.
After the GC they didn't continue on doing the same, they tried something different. Why? Because their path had failed.
And now with the Wii U falure and 3DS not being able to replicate GBA's success and the boom of the mobile market (which is already in full swing in Japan) it's impossible that even them won't realize that change must happen.

They may be more conservative than the rest of the japanese people, but they do run a business. And after 3 years staight of losses - which was a blow to Nintendo - i doubt that Nintendo will just keep on doing the same old thing.

Yamauchi was actually responsible for the push into the DS/Wii direction. I think even Iwata has said that directional shift came from Yamauchi, the idea to use two screens on the DS is also directly from Yamauchi. 

Of course Nintendo adjusts each generation, but out of the three console makers, I think Nintendo will definitely continue to be by far the most conservative of the group. Japanese business culture is incredibly heirarchial too, even Sony right now, Kaz cannot just snap his finger and get Sony out of the TV business, too many old, cold warriors within Sony wouldn't allow that to happen it would also be seen as bringing shame to Sony, etc. etc. 

As Westerners I think we actually don't understand all this stuff, we think it should all be easy and simple, but it most definitely isn't. 

When confronted with a stronger competitor, an important distinction. They could and did defeat competitors like Hudson and Sega head-on. Then bigger fish got into the pond. They tried direct competition, or what passes for that at Nintendo, in the GameCube era. Despite Sony's debt problems, they can still swing more weight around than Nintendo by a good stretch. Microsoft sees Nintendo like a fly buzzing around its head, and as you yourself said, if Microsoft really cared about the industry, they would have owned it ten years ago, lock, stock, and barrel. What you're saying right now is like criticizing the Viet Cong for "turning tail and running when the U.S. Army showed up."

That's how you live when you're a small guy operating in an arena dominated by people much larger than you.

Fair enough. 

I think when MS offered to buy Nintendo basically like it was nothing, Yamauchi learned then that Nintendo could not compete head on in that kind of a race, MS is too big of a company. 

But generally speaking though Nintendo does tend to really not like competetion. Like when Sega really started to attack them aggressively in the early 90s, Nintendo kinda reluctantly had to be pried out of their hole to fight back.