Yes, this is a fair point, as long as software is selling well, publishers will often support a device even if the hardware isn't doing great.
A good example of this is also the late era of the PSP and PS3, which were on the decline but still got a lot of support. In the case of the PS3, it's still getting good support.
However, this is part of why I started following hardware more than software as a leading indicator. Neither the follow-up to the PSP or PS3 got great support, especially out the gate. Sony had to make a herculean effort with the Vita to get it to where it is now and that's still not an amazing place.
This also actually supports your proposition that the 3DS will be well supporting for years after the 4DS comes out, even if it's just by virtue of publishers wanting to sell to the 3DS installed base.
I feel the reason for failed transitions though is that a lot of publishers operate on a three year software slate, and generally like to play it safe. If you're sitting here and greenlighting a game coming out in 2015 or even 2016, if you're making a game that would traditionally be for a dedicated device, the odds that you will greenlight it for the 3DS are pretty good, since it should still have the best and most active audience by then.
If you're deciding on your games that are for 2017 however, you have to look at the current situation and make a decision what you're going to focus on. The 3DS is likely to be a tapering software market at this point. Do you make a game for 3DS anyway? Do you make a bet that the next Nintendo handheld will take off? Do you make a cross-gen game? Do you add the staff on to a console title that needs more staff? Do you combine two teams to meet the increased standards that the 4DS has? Do you consider breaking up the team and making three mobile titles? Do you have them work on an f2p online game for Asia?
At this point, you have to try and do a whole bunch of prognostication about a time that is quite far away. So, you look at the current market. You see that 3DS software sales are good, but that the hardware is quickly slipping. You see that the Vita is unlikely to get a successor. You see that the PS3 is on its last legs, and that the PS4 and Wii U really aren't looking so hot. Also, your competitors don't seem to have many (if any) games announced for either the PS4 or Wii U either. The PS4 is doing well in the West, but Japanese games largely aren't doing so hot there. Mobile is growing heavily, and the big publishers are all investing it both it and PC online browser games. However, neither of those markets support the business model that your traditional dedicated device game uses.
It's a pretty hard spot to be in. When consoles started going down, you could move to handhelds and still use a pretty similar business model. Sure, the content was a bit different, but it still pretty closely resembled what you were making before, and hey, it was cheaper and easier than making a PS2 game and definitely than making a PS3 game. For the 4DS, maybe that's not as true anymore, especially if your series has any ties to higher production values.
There's often a big reward for getting the decision you make right, and sometimes a harsh penalty for getting it wrong. This is why I think we saw a lot of series leave consoles and bet on handhelds and why we saw a lot of developers who made major PSP games either move to 3DS or folding the teams into major console titles that did well in the West. I think this is also why we saw a lot of mid-performing DS titles evaporate into the ether to bet on the up and coming mobile market.
Now, have we hit a plateau in that shift? Hard to say. What still comes out on dedicated devices is pretty centralized around a few key successes for each publisher at this point, along with some really low budget filler titles.
I guess my perspective is that I feel anything that even raises the question of "The 4DS might not be as big a success as the 3DS." is bad, especially at this point, because this is when a lot of publishers are deciding on their early plans for the next generation of handhelds. Now, if they want to make games for a dedicated handheld, obviously they have pretty much no other choice as time goes on, but I think it's in Nintendo's interest to make sure that "they want to make games for a dedicated handheld" is their starting point in this thought process.
I agree that Nintendo to be pro active with the 4DS, timing and delivering a solid platform will be as important as ever. But not just for this generation, but also in combination with their account system, their upcoming console and handhelds. With the next system i feel they have to build an ongoing eco system that can be expanded with future consoles and system, while still supporting the base config that the 4DS sets.
With every generation it gets more difficult to get publisher to green light and commit new projects for a system that starts with a userbase of zero consoles and unclear outlook, The 4DS unveiling has to be more than just a handheld reveal - they have to really cater to all content provider and set their worries about the long term profitability of the market to side. Something that Sony did very well when they showed the PS4 for the first time and continued when announcing the price point at e3. Nintendo needs to have this show fir Japan as well.
Smartphone titles, console handheld titles and home-console titles - the next portable system has to be able to absorb all type of games and Nintendo has to provide the distributions methods needed. They already started it with the 3DS, but they have to do even better on 4DS and be on par with the portable competition. F2P, native MMOs and whatever - the system hardware wise and from a Software/OS point has to be ready for that stuff day one. They really have to take input from every developer into consideration - why arent you releasing software X not on 3DS ? Why isnt port of Y happening ? And use the answers to develop a system that western and japanese devs can easy worth with. So i expect them to go the AMD/Qualcomm SoC route with the portable, the time for exotic solutions like the Pica Chip on the 3DS is over when you wanna reach a global market and developers.
Timing is important and building momentum is more important than ever - just seeing PS4 vs. Xbox One from their unveiling to their launch performances.
If they can have Iwata on stage with a couple of statements like " The next portable will region-free again"," Every Virtual Console title bought on WiiU/3DS will be transferable at no cost on the new system", "4DS games will be all playable in Full HD on our next home system".
So while i dont see the 3DS market declining as fast, the time is approaching where Nintendo needs establish their next portable as a development option for software projects in an early state. I wonder if they are already talking with key partners outside the company - like Capcom, Level 5 and co. I would imagine that Iwata and NCL would be able to money hat MH4HD/MH5 for the next portable.
Content shouldnt a problem even if exclusive games take time to develop, i expect games from the last gen (Wii,PS3/360) and WiiU to find their way on the system, as well as mobile "smash hits".
While there is a need to act on some level, they want to milk the 3DS life cyle as effective as possible. Not too mention that with all the 2015 WiiU project you have to wonder how many devs can and are even working on 4DS software. Once they start talking about the next portable and unveil it, they have to release it in as reasonable time frame. WiiUs road from its reveal in mid 2011 till end of 2012 was a nightmare.
I cant see them realizing a new platform launch next year. They will prolong the 3DS lifecyle with everything they got price drop, revisions, Amiibo figures and games support and some fan favorites like maybe Metroid Dread etc.
The only thing worse than launching late is another subpar 3DS/WiiU like launch - they cant afford another screw up like that and shouldnt even think about unveiling the system if not everything is in the right place - from dev support, hardware, first party content, OS, name, marketing plan and message and so on. Their amateur launches with WiiU/3DS did cost them a lot of money and trust from even their hardcore fans.
