That's not quite true.  The NES being more powerful than the SG-1000 was an important factor in its success.  It was the most advanced console on the market at launch and had two years to build its position before Sega was able to counter.  

Hardware progression has always been an important part of the industry and Nintendo has been a part of that.  Power, to a certain extent, drives gameplay.  It certainly doesn't hurt games to have more power.  

The real question is, how close does Nintendo need to be to Sony and Microsoft?  Should they be on par?  If they were on par, would that mean third-party support?  If they're further behind, does that give them an opportunity to make money as a budget option?

The only thing I will say for sure is that Nintendo has to go one way or the other.  Getting caught in the middle ground where they're not quite powerful enough but also not quite cheap enough is probably a recipe for failure.

You might want to reconsider your assumption that more powerful hardware is a necessity for all people, or even that it's necessarily just a good thing. If you do that, you might find your answers. Don't doubt just everyone else but yourself as well. Trust me, it'll make you see the world in a whole other light.

well, Nintendo is awesome.

Impossible. The narrative will keep changing no matter what.

Makes you wonder, though. If graphics don't matter why not just keep releasing games for wiiu?

Of course graphics matter. Sales show it. People getting excited over graphics in various (NInty) threads show it (see "wow, look at Mario Galaxy running in x emulator").

No need to pretend around here. I mean it's fine to accept your favourite company's business model (I accepted Sony's approach with vita), but acting like you don't care? Come on now.

If the NX is on par with the PS4, 4 years after the PS4 released, I don't see how "that appears to be over".

Nintendo has to deliver Nintendo games to cater to their fans. The WiiU was lacking in a new Zelda, more 3D Marios, a proper Metroid, 3D Pokemon Stadium and proper Star Fox.

They don't need to the most powerful hardware as much as they need proper games.

True, but NES's competitor was the 8 bit Master System. S-G1000 wasn't NES's competitor.

Hardware progression is important, nobody is saying that it isn't. What gamers are saying on this thread is you don't have to have insanely photo realistic games that will easily become dated in a few years. You can make a stylistic game that looks good and is fun. Which is what Nintendo's philosophy has been for years. Reggie, Iwata...they say Nintendo isn't about graphics. But that by no means, says that they want to make ugly games. I've yet to see a Nintendo game that doesn't look at least passable. It doesn't hurt but it's not Nintendo's priority either.

Nintendo doesn't need to compete with Sony or Microsoft and they've made that known. Wii didn't compete with PS360, PS360 competed with Wii. Reggie said PS and XB can fight it out in that red ocean but Nintendo does its own thing and that's what makes them so great in my opinion. Even if Nintendo was on par, 3rd party games wouldn't sell as well on Nintendo platforms due to the fanbase of Nintendo and casuals. For Example, Call of Duty Ghosts released all in the same time frame on PS3, PS4, Xbox One, 360, Wii U, and PC.

In terms of power, PS360 are on the same level as Wii U right? All are Power PC based, Wii U even has a few hardware advantages. And yet, Cod Ghosts was the worst selling version across all the platforms listed above. Power isn't on my mind or many of Nintendo fan's minds. We just want good games that aren't too far behind in terms of graphical fidelity.

I think Nintendo realizes that they have to be powerful enough and cheap enough. Creating and selling a console on par with PS4 and Xbone is quite cheap now. With Wii U, it could have cost easily, $250 without that darned gamepad. So I think they learned their lesson on cost. No need for a 180$ controller that barely gets used for anything engaging. Nintendo hardware won't be sold above $300 again. Wii U was the first one to do so and once again, the Gamepad is to blame. NX will be powerful enough and Kimishima is certain that it won't be sold at a loss.

Ultimately, I don't want Nintendo to compete against Sony or Microsoft because the demographics for those hard core gamers are much different. Still, I am a Nintendo fan and I dabbled in all of their hardware to get games that aren't available on a certain console. For example I got a 360 for Blue Dragon, Lost Odyssey, and Tales of Vesperia. There are people like me who support any console that has appealing software. But there are also those who prefer a certain gaming style that will support a console and that console only. I have friends like that who won't look in Nintendo's direction and that's fine. I don't think Nintendo needs to sop up to everyone's desires to be a success. They need to do them because nobody is going to drop Playstation or Xbox just because Nintendo is powerful enough. It'll take much more than power.

Thanks for the understanding!

If NX doesn't have a tablet controller, then it will mean that they did learn from that mistake!

WiiU is a total failures and Nintendo has been losing money. 

Don't confuse Gameplay with Graphic. The most popular game this generation is not Uncharted or Halo, that title goes to Minecraft. Superior hardware and graphic does not produce superior software.

Nintendo was so far behing in terms of Graphic that their game were in development nightmare and took much longer then anticipated to develop (move from SD to HD graphic). Due to shortage of software, they start producing crapware like Mario party's,  MArio Tennis, Animal Crossing: Amiibo Festival, Star Fox Zeo, etc or simply had huge drought between software launch. Furthermore , thier decision to go with inferior hardware cost them the support from most Third party studios. 

Nintendo is a Coorporation and has a company they make decision towards making profit. Nintendo makes profit both on hardware and software. That's why Nintendo system are underpowered. 

Wii was the most succesfull home consoles of all time. Fans loved it. 

Nintendo problem with the WiiU was software not underpowered hardware. I think you will see that with the NX, Nintendo has modernized their studios to reduce development time on HD/4K games and they will partner more and more with partners (second/third parties studios) and Licenses out some of their key IP.  

Nintendo has never really focused on hardware. The GC was comparatively powerful and it didn't yield them much, while the N64 was also fairly powerful but relied on carts. Really, the only time I recall them having both a comparatively strong console and a good amount of success was the Snes, and that was probably more a matter of timing than anything.

Heck, in handhelds they've never once had the more powerful hardware than their competitors. That's just not how they operate, and it makes sense as they don't want to absorb those losses per console sale that Sony and Microsoft have been willing to absorb for years. Microsoft still hasn't turned a profit on Xbox sales, after all, and that'd be a pretty terrible situation for Nintendo.

The way they currently operate, either they make a lot of money or tend not to lose much. It's safer, and it's one of the main reasons they're still here while companies that attempted your strategy (Atari, Sega) have long since left the market.