No they don't need it. The demographic they cater to does not care about "HD". It's like offering cell phones to the amish.

The HD twins have started to outsell the Wii on a monthly basis pretty consistently now this year. This was not happening last year. 

In Japan, the PS3 has started to outsell/sell on par with the Wii. 

Natal and Sonywand are coming next year. Both HD consoles are now hitting mass market pricing (sub $300). 

I think Nintendo probably would be wise to cover their bases. It would be a mistake to wait until your sales cool off substantially before releasing a new console. Take your audience for granted and they will go elsewhere ... cardinal rule of the game market. 

Besides there's no rule that says they can't continue with the current Wii being positioned as a cheap, entry level type system well into 2011 and 2012. Hell, Sony still sells the PS2 and probably will still be selling the thing in 2010 and 2011. 

Autumn 2012 is more likely, I expect most next gen consoles to release in 2012

Wii lost momentum, now it's gaining it back. And the other controlers are not a threat unless there is a killer app. You can't prove otherwise by spouting anti-Wii talking points.

It's hard to say what defines a killer app for something like Natal, because I doubt you viewed Wii Sports as a killer the first time you saw it either. 

I suspect though the Natal launch at least will be huuuuuuuge, MS will back it with a ton of marketing dollars and probably a full on 360 redesign to go with it (wouldn't be surprised if they ape the Wii design entirely with built-in 4-8GB flash + WiFi too). I don't like everything Microsoft does, but its hard to deny they market the crap out of anything big they get and they usually are pretty good at rallying software developer support. 

I dunno if I'd say they're gaining momenteum back. HD console sales are way up this way, while Wii continues to be way down. They are also facing competetion in Japan for the first time in 3 years. 

It's a lot easier to dismiss Sony when they're in the $500 price ... but when they get to $300 and a slimmer redesign ... I think they do become more of an option for the mainstream. 

"It's hard to say what defines a killer app for something like Natal, because I doubt you viewed Wii Sports as a killer the first time you saw it either."

More opinion myopia. I knew from the reaction at E3 it was going to be a killer app.

And the Wii isn't about competition with anything but public interest (Super Mario Bros Wii matters for that far more than a new system). The HD consoles aped the Wii, not the other way around. Thinking that isn't them admitting the Wii way was right is just foolhardy.

I think Iwata does follow sales trends very carefully. Including those of the competition.

The main reason for instance the DSi exists at all IMO is only because the PSP started outselling the DS in Japan.

Iwata wants to "win" ... Yamauchi was different, he would sit back and let other companies build up an attack strategy against Nintendo and eventually that led to them stripping away much of Nintendo's market relevance.

Assuming Wii 2/Wii HD release automatically means the current Wii is phased out of the market is also outdated thinking. That's not how the game market works anymore. Maybe back in the NES/SNES days (even then I recall the NES stocked at most retailers well into 1992/93). 

"IMO" =/= "evidence"

He's never given any such indication, and the planning for the system was way before that, so it's impossible.

If the attitude that Nintendo takes from here on out is one of "we're the best, we don't have to pay attention to any market trend, we're just going to keep this on cruise control" ... they may not lose their marketshare today. They may not lose it tomorrow.

But if they're going to have a passive, arrogant attitude like that, eventually it will bite them the ass. It's the exact some sh-tty attitude they had when looking at the Genesis or the Playstation ... you don't get anything for being cocky in this industry (quite the opposite). 

It's like a boxer ... even if you're the better fighter, if you come into the ring and give the other guy a lot of time and space, you're eventually gonna get knocked on the jaw pretty damn hard and probably find yourself on the canvas. You give Sony and MS that much time and space to formulate against you and eventually they are going to come up with something. Again maybe not today, maybe not tomorrow, but eventually. 

Nintendo is in a good spot right now. The worst possible thing they could do right is rest on their laurels. There's no downside to being aggressive whatsoever. 

Look at what Apple has done with the iPod brand ... they've continually improved it and kept it fresh and ahead of the competetion. No one can keep up and now pretty much no one even tries. But they could've sat on their ass and been happy with the regular ol' black and white clickwheel iPod. Stay hungry, stay aggressive. Never take your audience or your competetion for granted. That's how you stay on top.