And this common confusion, once they educate these people, is it clear that the confusion itself has caused the lost sale, or the fact that the person has to buy a new system to play new games?
"Confusion" is doing jack. All people need to know is that there are new games out there they want to play, and the ads take care of that, along with blue boxes on store shelves. When you find out you need a new system to play those games, the confusion is gone. Suddenly it's just price and software.
At the end of the day, this is where the buck stops.
We can all play armchair product designer.
When all is said and done, none of it matters. What matters if if Nintendo finds an application that people have to have. People then go find what they have to do in order to get that application.
In a sense it's similar to the "trouble" that people have selling the masses on a non-iPad tablet. Geeks, and sometimes store employees, will go on about about this or that device that's not Apple branded. The casual consumer isn't real clear what the difference is between any of these devices anyway; they're all just touch plate thingies, right?
But in the end they always buy the iPad. Why? "Well, does that tablet have App Store? I see these Apps (tm) and I need App Store. I want App Store." Even if the Apple product is TWICE THE PRICE.
Content and mystique always drives sales in the end, over specifics of how one product stacks up against another. The average person isn't picky about how they have to get the content and will even pay more to not get "brand x" (as they see it).
This affects core gamers too. I've known plenty of people who got Xbox 360s for Call of Duty for one reason: because they know Xbox Live is The Place To Be (tm). That's where you play real man's COD, that's what they need. Even if they have to pay a fee for online multiplayer that they wouldn't have to pay on another console.
Ironcially enough, if we're talking about the mainstream in context of Wii U, then one aspect becomes partially irrelevant: hardware power. It doesn't matter if to the expert enthusiast gamer, Batman on Wii U "looks the same as our 7 year old consoles" and they know how to see frame drops. 3D visuals in games began achieving parity for satisfying the average person several years ago. Everything sort looks photorealistic, especially since major games are wrapped up in production values to sell the experience with nice cut scenes and shit. In a certain perverse sense the average person cares more about the core useful content of what they're after than an enthusiast can appear to - the aficionado will turn his nose up if the wrapping isn't gold-embossed ribbon with a truffle on top, but it makes no difference to Joe Average.
I have no idea if Nintendo is going to the thing they're looking for to leverage the masses, but the "confusion" angle is overblown. Whether or not it's worse than XX comparison console launch won't make a difference in the long run.