I've been saying this for a while, but Nintendo needs to start actually targeting the western market more, with the kinds of titles that 3rd party does, because the console market business mainly rests in those kinds of games and not the core audience Nintendo has been targeting for ages.
They either go more casual or too hardcore mature, there's little to no grey area.
I agree with Soundwave, in that their next platform needs to be this system that is more than one platform, with hardware that can play everything Nintendo releases going forward, maybe also stuff from this generation and unify both their handheld and console market to remove the boundaries between install bases.
Innovation for innovation's sake doesn't work, but innovation to fulfill a need does and this would be the most innovative and logical business thing Nintendo can do.
I honestly think it's something that could help to improve their brand image, especially if they actually take an approach to making games like Sony does, which means wide variety and diversity of your line-up. Keep being Nintendo, but also learn what actually works to bring in the masses.
Nintendo definitely does need to compete with Playstation and Xbox if they want to survive, otherwise you either go into the mobile space and got lost among the hoards of other content providers (and how the hell do you make hardware that is anymore interesting and appealing than products that already do that well) or you stay being Nintendo as is and consistently get dwarfed by the competition and your market realizes that they can get way more variety, with a lot more interesting games than only Nintendo can provide alone, with the odd 3rd party developer that happens to take pity on them.
Yeah Nintendo needs to basically hit this thing out of the park and do everything they should have done for generations, along with merging their handheld and console markets together to finally appeal to every publisher possible with as many consumers as they can give them.