Agreed. And it also hurts the brand name as the people who loved the original Wii have moved on whereas the people who didn't are still around. It's like when one of your friends starts treating you and fellow friends like second-class citizens when he has a new girlfriend but then comes back trying to get in your good graces once she breaks up with him.
In terms of what they can do, I think we need to move past the Gamecube 2/directly competing with Sony/MS is a bad idea thing. Everyone keeps saying that there is no reason for Nintendo to do what those two are already doing. But why not? Why can't they push one of them out? Make a platform that is competitive in terms of specs, mend 3rd party relations and sweeten the pot for them, improve online infrastructure, avoid silly hardware decisions like sticking with cartridges too long or the GC mini-discs, improve marketing and perception in American/Europe, etc... With the first-party talent they have, and a little bit of work, there is no reason they can't create another NES/SNES type situation.
the problem is that unlike companys like sony and MS Nintendo is a small company that simply cannot aford to take such risks .
the last time they played the power game they where totaly chrushed along with Xbox by the monstrosity that is PS2 and they suffered big losses
remember that nintendo is a games company only . they have no other branches that could leverage any loses taken from their games like sony and MS can
Now imagine if they decided to try the power game again and build a console with the same specs as PS3 but nintendo has to take the same masive losses that sony had to take.
in this case sony managed to survive altough they were bloodied and beaten .
however nintendo in this example would've been dead and buried.
To expand further, Nintendo's mistake with the Wii wasn't going after casuals; that was a brilliant move, as evidenced by their enormous profits and growth from 2006-2010.
Instead, Nintendo's mistake was losing those casuals to Apple, Facebook, and Google. Those casuals everyone prophesied would go away and forget gaming haven't left -- they just moved on to PC/iOS.
That was Nintendo's mistake, not the act of going after casuals in the first place.
i don't disagree that wii in terms of sales was a giant success
but i disagree with the statement that hardcore market has become irelevant.
when a new console is released the first people who will buy it is the hardcores who will buy the system and create your main fanbase so companys like sony and nintendo should focus their efforts in the first years
to keep expanding this group.
Once that group is big enough then they try to get the casuals on board
IMO nintendo skipped the first step and went straight for the casuals to great success however without a big enough fanbase to sustain it the wii died when casuals left the system for pc /ios
also a question if i may, If you had to make the decisions how would you have prevented those casuals from leaving your fanbase and going for the next big thing ie smartphones and pc's?
to me it seems like an impossibility.
also YMMV on wheter you considder the ps3 a failure but despite the gigantic sales of the wii it also quickly peterd out after 3 years
meanwhile both the ps3 and Xbox 360 are still selling at a profit and will probably keep doing that years after their succsesor has launched
so we might very well end up with at least one of the HD twins surpasing the wiiu in sales altough probably not enough to totaly return the losses that where made.