If the number of Ps3 + 360 sold collectively is more as or less the Ps2 + OG Xbox it means than the numeber of new customers who entered the market is more or less equal to number of those who left.

You have competition when customers percive that two or more goods are both viable choices to satisfy the same need. Canonical example: mobile phones. Phones weren't competing with laptops and computers unitil they beacame a viable tool to browse the internet - so two viable options, same need.

The customers who wanted to play FPS / online games didn't even percieve the Wii as viable alternative. Same goes for those who bought the Wii for Wiisports. The Wii didn't have any direct competitor unitil the Kinect came out.

That's not to say the Wii didn't compete with X360 and Ps3 at all, but the competiton was marginal. The Wii was percieved as tool to satisfy a different need than PS3/X360, and that also explains why many PS3/X360 players also had a Wii in their houses.

I think we are saying the same thing here just from different angles; that Wii appealed to demographics that PS3/360 didn't and vice versa, but that there was still overlap; consumers for whom both were viable purchases. For these latter consumers, getting both wasn't always an option, hence there was competition.

They don't need to be dominant. They can make a console that everyone wants next to their PS4 and still make mad profit. The end game is profit, and I see that in their future.

If they cannot even do that however, I would hope they would go 3rd party for console.

Where's the neither option?

They can make a portable console that can coexist with the PS4 since I doubt Sony will be revisting the Vita/PSP concept again.

A stationary home console though? I'm doubtful. Even if Nintendo makes some wonder controller again, what are the odds that MS/Sony don't copy it much more quickly this time?

With a steady flow of 1st party IPs (real ones like Zelda NX, 3d adventure mario, metroid, etc) of which they have more of than any other company and 3rd party support in the form of more contracted 3rd party exclusives, the NX console will be justified on that alone.  There are plenty of people out there who would buy it to play those games alongside the multiplats on PS4 and PS4 exclusives.  Unlike the XBox brand, Nintendo has more of an identity to set it apart from Playstation.

Like I said, it does not need to match PS4 sales.  It just needs to make a decent profit and therefore be considered a success.

Wii U doesn't make sense as a console to play family friendly games because there aren't any good ones. Hardware is only the box used to play the games.

Out of the games on your list, the only game I own is MK8, it's easilly the worst Mario Kart. But it's a good example of Nintendo's problems; the game was outsourced, the core fun is gimped because someone apparently "knew better" than the gamers what the gamers wanted. Ironically, MK8 is one of the best games this generation.

Nintendo's strength have always been family friendly games that 5 year old kids find exciting, as well as men and women in their 40's. Instead, todays Nintendo makes games that only the kids may find exciting, the games are on the level of the Lego games with endless potty humour.

Mario Kart 8 wasn't outsourced.

Nintendo Land, Mario Kart 8, Wii Party U, Wii Fit U, Mario Party 8, etc. are family friendly games.

It will be like Sega.

You're right about Mario Kart. I recalled it was developed by Bandai Namco, but apparently there were just a few Bandai Namco devs involved. My bad. Gonna have to give you a death stare.

Mario Party 8 has a huge problem with it's slow pace, because you're constantly being interrupted by something. I've had that game since launch. One of my top ten most played Wii games, though.

Other than that, the only game I have on your list is Wii Fit U, and while you're correct about it being family friendly, it's holding back badly; no online play, no fixing on the issues with the slow inteface etc, it's a game that's being pushed on the market without real effort "we sold 20 million Wii Fits and another 20 million Wii Fit Pluses, so churning out Wii Fit U is another 20 million quaranteed with no real effort".