Let me put it slightly differently: Nintendo cannot hope to credibly compete with Sony/MS for the Western core console market *unless* they made huge investments in software aimed at that market a while back and have successfully kept that completely under wraps.
Even in that scenario, though, I still think they'd have a better chance trying another tack given how painfully late they'd be to this party.
If they only go all out to try and please EA, Ubisoft and Activision, I've got a feeling they'll find that's not entirely where the money is, even if it may well be the key to unlocking higher hardware sales.
Sony and PS4 are doing very well this time around, but cumulatively - the 8th generation as a market whole isn't as healthy as the last one. VR might change the game and give the 8th gen a nice boost (sort of like the Wii / Kinect effect), but I've got a feeling its going to be so cost-prohibitive that uptake of VR will be slow. I'd like to see the return of arcades in the West, and I think if people got their heads together - VR could be a huge part of that.
VR pessimism aside - I definitely think VR is something Nintendo should be thinking about. If it takes off, I'm not sure they can afford to not take part.
Capcom's assessment of the hardware markets is spot on IMO.
- Its easier for PC and mobile consumers to part with their cash, because the economy is different, there are more affordable offerings and the actual mechanisms of paying for goods are so mature.
- Console buyers are brand loyal and buy in heavily to sequels.
I think too much acceptance of the latter point is a bad thing. We are set upon a course of major franchise fatigue. I think people are more receptive to innovation and novelty than a lot of people would like to believe. The lack of anything majorly 'new' is to blame for the low end of the market being eaten away so easily. So while I wouldn't like to see a new Wii-U type experiment out of Nintendo -- if they've got any good ideas to change things up, they should definitely execute them. Whether an IOS style merger of their platforms is enough remains to be seen, but it could be a good start.
Levels of success (such as the PS2 and the Wii enjoyed) can only come about when the product not only captures the imagination but also has its library so ubiquitous and easy to access. Things are different today than they were even just a few years ago. People buy a lot more digitally, brick and mortar is suffering. Its the path of least resistance. People spend as little as they can for as much fun as they can, as conveniently as they can. Phone contracts and app markets have changed the game.
I think Nintendo need to keep that in mind. Its always been about balance, what you offer for what you charge.. that much will never change. It needs to have enough power to not be dated on day 1, it needs to have enough power to actually turn heads and regain some of its old audience, but it needs to be affordable for its core audience and represent something truly valuable and convenient.
Making the handheld and console compatible could really go a long way to swaying people on the value perception. They could unlock some serious money and secure some longevity if they make the handheld NX as accessible as possible. It needs to be as accessible as mobile, and ideally, even Android compatible or something. The locked-in eco-system of traditional consoles is facing serious challenges at the moment, but it doesn't have to die. It can co-exist. They just need to make it easy for people. And easy !== 20 second load times and, I hate myself for saying this, "kiddy" menus. Make the handheld the affordable, mass-market targeting device, and make the console the hub that the library can be enjoyed on in new ways and in higher fidelity.