This, absolutely this. Nintendo makes absolutely fantastic games, but characters/franchises like Mario, Link, Kirby, etc, simply do not have the appeal that they used to , especially among the younger generations. LOADS of kids got their parents to buy them a 360 last gen just so that they could play Minecraft with their friends. A decade from now, the 5-12 year-olds of today will grow up to have nostalgia (the same kind of nostalgia that many of us have for Mario, Sonic, Nintendo, and Sega) for Minecraft and Angry Birds. Hell, even Pokemon seems to have WAY more appeal with 20-somethings than it does with its target audience, children.
Minecraft's massive success shows that all gamers haven't suddenly all become graphics whores.
Nintendo needs to take a long, hard look at recent games such as Minecraft and make something similar with a dose of "Nintendo Magic". Preferably a new IP, as I feel that their long-standing roster of characters is almost alienating to people who are new to Nintendo. In the meantime, they REALLY need to work out a deal with Mojang to port Minecraft to the Wii U. Nintendo would handle the porting in-house and add awesome GamePad functionality. Instead of buying character skins as DLC like on the 360 version, players could make their own custom skins on the GamePad screen and share them on Miiverse for anyone to use.
Edit: Welp, looks like Ninja Scooter beat me to the punch.