I think they need to be even bolder than that. They need to honestly redefine a lot of their incredibly outdated hardware/software philosophies. They need a top to bottom company rethink that is actually in touch with what the market is in 2016, not 2006 or 1996 or 1986. They need to wake up and make some real tangiable changes. 

Mobile should become their main outlet for casuals/low cost kids market. Why keep banging your head against a wall for this audience when Apple/Google sell way more than the Wii ever could dream of. Nintendo's goal here should be to become more of the top 3-5 mobile game providers in the world. This will be earn them monstrous amounts of profit and take care of this lower cost demographic. Let Apple/Google do the leg work for a change, Nintendo has access to hundreds of millions of consumers here, more than any game system could allow them. So take advantage of it.

The portable IMO should take over the position the "traditional Nintendo console" has had in the past ... that is kind of the in-between device that is relatively affordable. Today mobile tech allows for XB360 or better visuals, this is enough for most/all Nintendo IP. With such a huge leap in mobile computing power for cheap, it's time to rethink what such a platform can be. Add the ability to actually use it as a console on top of being a portable (streams wirelessly to a TV). Now you have an affordable all-in-one portable that can double as a home device for the "family/Nintendo-only" gamer that can be played anywhere with "good enough" visuals even for a TV. $200-$250.

The dedicated console concept should change for 2016, consoles are no longer popular in Japan, and since your kids/low cost market is well served by the above two pillars, go upmarket with your home-only console. The console should be very high-end so that it can handle very high end Western PC/third party games with the ability to play the same Nintendo games from the portable, just at higher effects. This also frees Nintendo from the problem of having to make two discreet software libraries, which they clearly are unable to cope with. This product should be aimed for the US/Euro markets and pro players, no nonsense like it needs to be small enough to fit inside a hobbit's living room and only consume 30 watts or electricity. Americans/Europeans don't give a shit about that stuff, go big or go home. $350, 14nm/16nm Arctic Islands GPU that outperforms the PS4 by an undeniable gap and is upgradable to 4K down the line so Sony/MS cannot simply just make a stronger piece of kit and call it a day. 

The POINT of hardware is to get people to simply have access to your games. That's all. So Stop acting like you need to go on a crusade as to why VR/HD/online/CD is "wrong" and just let people play the fucking games. Also making or obsessively focusing on any one demographic is stupid, your responsibility as a platform maker is to have a wide breadth of content that makes everyone happy, Sony understands this which is why in actuality, Playstation is far a more mainstream brand than "Nintendo" these days. 

Good luck with that $350 Nintendo console that will be competing with a $250 PS4/XB1 for 2-3 years.

The majority of gamers are in their 30's, "core gamers" and that's what MS/sony target. I think it's a mistake for nintendo to pander to mainly casuals (non-gamers) because they are very fickle and ignorant about gaming. The wii was popular with 'em and the wii u wasn't. A good bit of casuals didn't even understand that the wii u was a entirely new nintendo console and not an accessory. Nintendo would be better off building it's fanbase by treating core gamers seriously in the long run. Nintendo can make games for core gamers and nintendo fans. Why can't it have a diverse game library?

They didn't support their consoles with enough mature themed games, used a normal controller right off the bat and had 3rd party support. They haven't tried that path yet. Hell, if it just did the first two, I would probably buy a nintendo console. Nintendo pumps out a lot of exclusive  games but the vast majority of those games aren't interesting. All it really has to do is make those games interesting to be more successful in the gaming market. 

Like I said, dividing everything into "core" & "casual" is illogical as those don't describe demographics. The audience of kids, females and families would buy and play games on consoles if they had a sufficient amount of games targeted towards them, instead it's primarily online shooters, open-world action & sports/racing sims, games that primarily appeal to teen/adult males.

GameCube had a ton of mature games, used a pretty standard controller, and had 3rd party support, still sold like shit at $99.

So you think it would be worth it for a dev to build games for consoles that target those demographics? Maybe indie or low budget games might be. 

When you compete more directly in a standard way, the margin for error becomes less. So doing stupid things like say -- making your console look like a purple Fisher Price toy when you're trying to sell Resident Evil games (as one example) becomes much more damaging. They would have been far better of with a $250 GameCube (launch) which had a cooler looking design that didn't turn off adults, launched in 2000 (fall) instead of giving Sony a full year head start, and supported DVD playback (or at least had a DVD "Remote" that would off-load DVD royalty fees to an accessory) than going for a kids-centric design. 

If they had done those things IMO they'd have been a comfortable, very profitable no.2 that generation and probably sold in the range of 50 million systems.

It didn't have a ton of mature games compared to the competition. In regard to it's sales, what was it competing against? It's controller was not "standard" and it broke easily or got worn out quickly. it had a very weird feel to it. The console was purple. 

GameCube was a year too late to market, which sucks because the hardware itself was actually ready to go for 2000, but Nintendo didn't have games ready.

Which is a shame because the PS2 actually was a fairly poorly made system that caused a lot of dev headaches, Nintendo could have taken advantage of this, but they gave Sony a 12-18 month headstart in all regions, which allowed Sony to build a large userbase and by then it was basically game over.

Then Nintendo basically decided they would make 8-9 other unforced errors to lose to Microsoft on top of that for good measure (lets make a cel shaded Zelda game, lets make a Mario on vacation game with only tropical levels, lets make the system purple, lets say no to DVD playback and online play, etc. etc.).

This is like losing a tennis game but not really losing to your opponent, just losing on your own errors.