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[Chittagong]

I have had this post in mind for a while. A few years back I wrote about how Nintendo was going cheap with Revolution, and then later how a timely HD cousin for 360 and PS3 would be the best way to stay in the console race.

As we now know this didn't quite happen. Wii U arrived too late to benefit of shared development pipeline with PS3 and 360 and was conceptually flawed with the pseudo tablet. It also transpired that Nintendo was completely unprepared to full scale HD development.

For quite a while I have thought that Nintendo should completely reject competing with Xbox and PlayStation. Based on my years working at Club Nintendo I have formed an idea of what kind of a console would play into Nintendo's strengths. This is it.

Nintendo's dead end in the home console business

I base my thoughts on a few assumptions:

1. Wii U is largely unsalvageable as Nintendo's first party efforts don't alone carry it and everyone from devs to retailers are dropping support.
2. Nintendo is unable to create a technically advanced console to share development pipeline with PS4 and Xbone in a timely, cost efficient manner.
3. Nintendo is unlikely to get hit by the lightning for a third time, meaning it can't bank on an interface innovation in creating a successful home console – like touch screen and waggle did.

Nintendo's core competencies

Given its inability to compete, Nintendo will need to completely distance itself from the home console race against Xbox and PlayStation. It should completely reject the massive disc-based AAA games weighing tens of gigabytes and requiring development teams in the hundreds.

Nintendo will need to look at its core competencies and craft a plan for the living room that plays maximally to its strengths:

• Affordable hardware
• Intuitive controls
• Huge vault of franchises
• Family friendly accessories
• Quick pick up and play multiplayer games

Designing home console hardware playing to Nintendo's strengths and minimising its weaknesses

On this note, Nintendo should design a console that achieves the following

• Radically low price point, impulse purchase at - $99 or $149
• Bundled with intuitive Wiimote motion controls
• Designed to play lighter, less development intensive games
• Made to benefit of Nintendo's huge back library
• No physical media to minimise retail dependency
• A range of single-franchise accessories
• Basic media partnerships e.g. Netflix

Why an Apple TV like device would work for Nintendo when it works for nobody else?

Nobody has been able to make a success out of the mini TV boxes market yet. Google, Apple and Ouya have all failed in the living room proposition. The reasons are a no-brainer really - they don't offer enough value or a good experience.

• Weak gaming experience
• No apps ecosystem
• Clunky controls and slow UI

Unlike Google, Apple or Oyua, Nintendo can uniquely address all these points.

• Nintendo can create great gaming experiences.
• Nintendo has enough quality content to kickstart an ecosystem.
• Wiimote technology makes for a perfect all-around TV controller.
• Wii UI with Wiimote feels intuitive, fast and responsive

An untapped market – apps and games for TV

The market already has developers of smaller, lighter games who would benefit of an expansion to the living room. Nobody has become a defacto app platform in the home yet. There are many companies that would benefit of a winning home platform, however:

• Angry Birds console games sell in the millions at high price points
• Companies such as King, Supercell and GungHo are not yet present at home
• Rise of lighter indie games such as Hotline Miami, Fez and Walking Dead show potential of technically light games in the living room
• Film studios and TV channels are looking for direct distribution for consumers

"Nintendo TV" concept

This new console I have dreamed up is designed to be an incredibly easily marketable proposition that is easy to demonstrate and explain, unlike Wii U.

• A small, simple box that comes with a Nintendo remote.
• Based on an ARM processor. Plays iPad quality games in 1080P.
• HDMI, Wi-Fi, 128GB storage.
• Nintendo original games.
• Nintendo vault classics.
• Indie games.
• Netflix and other TV + Films.
• ESPN and other sports

"Nintendo TV" key selling points

• Nintendo hits. Experience Nintendo Sports, Super Mario 3D World, Game & Wario and other Nintendo franchises using Nintendo's unique motion controls.
• Nintendo classics. Play timeless Nintendo classics such as Earthbound, Super Mario World and Zelda: Link to the Past with Nintendo classic controller
• Indie gaming. Get the best independent games such as Walking Dead, Fez and Hotline Miami
• Enjoy films and TV with Netflix
• Watch sports with ESPN

Illustration

I created this mockup to illustrate the design principles, branding, messaging and value proposition - how simple it could all be.

"Nintendo TV" gaming catalog

Using a quad core ARM SOC processor, I have selected games from current Nintendo and iPad catalogs to illustrate the level of gaming experience possible with this new miniature system. While big 3D epics are less feasible, a lot of Nintendo's current catalog scales would scale to hardware less potent than Wii U.

"Nintendo TV" value proposition

For families and young adults,
Nintendo TV is the device to offer fun Nintendo multiplayer games,
new indie hits, Nintendo classics, films and sports.

• Unlike Apple and Google, Nintendo TV does gaming really well with Nintendo remote and Nintendo's library of games.
• Unlike Ouya, Nintendo TV is backed with a large catalog of great games from day one.
• Unlike tablets, Nintendo TV features multiplayer gaming with friends on the sofa – Nintendo Sports, Nintendo Karaoke, Nintendo Fit.
• Unlike PS4 and Xbox One, Nintendo TV is super cheap at $149, offers Nintendo remote motion gaming for the whole family and runs Nintendo franchises.

"Nintendo TV" design and branding

To fully distance itself from the Wii U failure and position itself as the defacto living room player, Nintendo will need to carefully design and brand the new device.

1. All new look for device and remote – metal design to fit home electronics, not toy-like
2. Branded 'Nintendo', so that you can 'play Nintendo' once again
3. No references to Wii, all franchises rebranded Nintendo
4. Grown up, minimalist UI design in Windows Phone / Windows 8 style
5. One Nintendo account for all content

Disruptive pricing model for home gaming

With this new approach Nintendo could radically alter the price points it sells its home experience at, completely distancing it from PS4 and Xbone

• Hardware prices at $99 - $149
• Accessory prices at $69 - $99
• Game prices at $4.99 - $14.99

This would also shift the balance of Nintendo's revenues significantly.

• Moderate margin on base hardware, around 20-30%
• Hardware revenue comes mainly through accessory bundles
• Software credits sold in physical retail with 70%/30% dev rev share and 20% retail margin

Most importantly, priced low and becoming an impulse purchase for the living room, Nintendo TV could become the first home console to sell 200 Million units.

What does GAF say? Would you buy one?

Is there a better way forwards for Nintendo for re-establishing their home business?

 

[ThoughtsOfSpeaking]

No one will pay Nintendo price for games for such a system. I think your logic is sound, but it goes against everything Nintendo thinks regarding value of software.

If they reduced the price of games to $10 a piece and embraced indies it would be a surefire hit.

 

[Mashin Haters]

that would be very cool. they should also make a NintendoPhone and be able to connect to the Nintendo Tv to use a controller!

 

[Lambtron]

I'd rather they drop out of making home hardware all together than they make a turbocharged Roku.

 

[eorl]

Honestly I think Nintendo will try for something similar, maybe a two-part method which offers the smaller box for convenience sake but some tie-in with their handheld 3DS/whatever is next. Maybe even offer a "hardcore" edition on the side for a bit more that gives the potential power hardcore gamers want and will utilise.

That or they just make a next-gen console with the right specs and say "here is power, use it!"

 

[Zajora]

You worked for Club Nintendo? That's pretty cool.

This is an interesting idea (though I hope they don't call it Nintendo TV) but I can't imagine Nintendo would ever release a console weaker than its predecessor.

 

[kurbaan]

I think the WII U was supposed to be that console with all the TVII stuff but its just too expensive.

 

[8sanders]

they should partner with Tivo and make the "NinTiVo"

 

[Minions]

The really need to move away from the Wii Moniker for sure. Personally I think they need to relaunch the console at a substantially reduced price point, with SSB and Zelda Wind Waker this Holiday. More commercials showing/differentiating the console from the Wii. Most people to this day, still believe the Wii-U is a tablet addon for the Wii.

 

[Mileena]

That sounds kinda terrible for gamers. I'd rather they focus on making the Wii U not suck shit. So much for that summer update to speed up the OS huh?

 

[Chittagong]

I think the WII U was supposed to be that console with all the TVII stuff but its just too expensive.

yeah they got so many things wrong with Wii U that it's almost incredible. Design and branding failures aside, they made some really bad technical and UI choices:

- betting on an ancient, traditional console chipset architecture: expensive, big, dev hungry
- basing business model on optical BR games, optimal for huge development teams
- doing away their biggest advantage, Wiimote
- confused kiddie main UI with Miiverse

 

[Jotamide]

Nintendo needs to go full handheld on its next console and have a peripheral that allow you to play those games on your TV and with local multiplayer support.

 

[Fredrik]

Shouldn't all be possible to achieve with WiiU over time? except the tiny Apple TV box design.
Price drop + indie dev friendly + lower game prices + huge selection of classic VC titles + improved OS.

 

[Chittagong]

Shouldn't all be possible to achieve with WiiU over time? except the tiny Apple TV box design.
Price drop + indie dev friendly + lower game prices + huge selection of classic VC titles + improved OS.

pretty much - but they are hindered by the tablet, ancient Power PC architecture and computer style GPU, BR drive and physical distribution as the main business model.

 

[Mumford]

It sounds good in theory, but I'd love for Nintendo to just turn around the Wii U. I love my Wii U, and would love to see it become successful.

 

[CreateNowSleepLater]

Nice post but here is the real problem. The Nintendo generation are in their 30's, 40's and 50's. The Wii took off not because it was a great game system but because it was a fad and you can't build on a fad once it's over.

Nintendo can still salvage the Wii U if they drop the LCD pad and drop the price $100. Devs will not develop for that game pad anyway at this point. Nintendo needs to ask some serious questions about itself. It either needs to be all in or go third party.

 

[jluedtke]

What if Nintendo didn't bother building yet another set-top box, but instead made a "Channel" service like Netflix or Hulu+? That way, they could pop their "Virtual Console" (eh?, eh?) on multiple devices like AppleTV, Roku, AND PS4 and Xbox One without necessarily being considered a third party.

I just blew your damn minds!

 

[SmokyDave]

I'm not entirely sure what I think of the proposition yet, but kudos for the work you put into the OP. That did feel like a slick presentation.

My gut feeling is that I like it, but you risk waking the dragon*. Apple already has a very similar product on the market that they've put no effort into yet, and they will soon have a standardised controller API. They already have an ecosystem that crushes anything Nintendo could get together any time soon.

That's not to say I don't think they should do it, however. I think I like your idea much more than I like my Wii U.

*Sorry, I couldn't resist.

 

[Liha]

Nintendo + Apple together?

 

[Kinthalis]

You guys are still stuck in the past. Dedicated hardware is in it's death throes. Next gen consoles are probably it. And handheld game dedicated hardware is not going to compete with phones and tables, ever, specially outside Japan.

Nintendo needs to go gaming as a service. Offer it's games on smart TV's, internet TV addon's like the ROKU, Chromecast, OUYA , PC and existing consoles. Basically go third party.

Release the next zelda, available digitally on PC, Xbone, PS4, 360/PS3, 3DS, Android, iPhone/iPad (probably a modified version to handle touch controls), smart Tv's etc, etc, and they can sit back and watch the dollars roll in.

No wasting billions of dollars on hardware that might fail, or on marketing and supporting that hardware. When ALL gaming goes service vs hardware eventually, they'll already be there with an upperhand vs the competition.

 

[Josh7289]

I don't think Nintendo has the resources (money, technical ability, business relations) to compete with Apple directly.

Really, unless they have an explosion of creative thought, I think they should more or less leave the home console market. Or make their next portable also a home console in some way.

Edit: Another thought: People still want to buy Nintendo's games; they just want to pay portable prices for them rather than home console prices. I see you integrated that into your presentation, though I still think the system should be some kind of portable/home console hybrid rather than the box you're proposing.

 

[outunderthestars]

I would buy one of these. Nintendo doesn't have the UI and network abilities to make the OS sleek and modern though.

Maybe Apple/Google could buy them.

 

[RobFox64tm]

I can see where the OP is going with this, but I just have to question why this system would have to be WEAKER than the Wii U is? Wouldn't it make more sense to just repurpose the Wii U hardware (while adding a bit more RAM and higher clock speeds)? It'd probably be less R&D costs to do so also.

I also object to the fact that you feel like nothing would be lost on Nintendo's software front with such a proposition. Nintendo may chose lesser hardware specs but at the same time they do wonders with what they have. Nintendo games have far more value than the apps and time wasters associated with this kind of device, despite the hyperbole you often hear suggesting otherwise.

 

[Turrican3]

Seeing Nintendo morphing into a 5-15$ games producer doesn't look that exciting to me honestly. :-\

I'd rather them push digital delivery if they really have to make the Wii U similar to the platform you're describing (I believe they could, over time, as the HW will become less and less expensive to produce), but keeping a solid lineup of their traditional high-budget, highly polished games is a must for me.

 

[Snakeyes]

Why not just build a well-balanced system with an inexpensive gimmick and traditional controller?

 

[Gamerloid]

I really like the way this OP is constructed. Makes it really easy to understand why it would work. With a low price like that and offering more than what other steaming devices do, I'd certainly buy one. Plus they could make some great games as seen with what they could do with the eShop.

Interesting idea.

 

[Kai Dracon]

I have to admit, this is an overall good take on Nintendo's prospects.

I cannot see a need or a purpose for 3 identical "hardcore" gaming console platforms. No matter who wins, someone is going to lose big time. But Nintendo is very much tied together with hardware. I realize many people see content as completely generic, therefore insist Nintendo should go 3rd party, make iPhone games, etc. But that goes against some of Nintendo's strengths and would be putting a lot of their built-up ability to waste.

Echoing others the Wii U really seems, in underlying philosophy, something like what the OP outlines. Naturally it is too expensive (for now) to facilitate this kind of strategy. I do wonder though if Wii U could be evolved into what this proposal outlines with a combination of price drops and aggressive development and marketing of the right software and applications. Or at least turned into a foundation for Nintendo's next non-portable hardware platform. (Assuming they do not, in fact, go portable or portable hybrid hardware.)

Edit: for those who would reject the idea of Nintendo turning into a "cheap game" company, remember that Nintendo's scale of development can still make games like Fire Emblem profitable without having to sell millions of copies. I also wonder if more affordable technology would allow for a genuinely inexpensive box with at least Wii U capabilities in just a few years.

 

[SmokyDave]

Numerous opinions with humongous derail potential.

I would hope that this post does not come to dominate the discussion.

 

[Trogdor1123]

Isnt that essenially an OUYA with a wii remote? Nintendo just needs to make a system based off a normal control, put out some decent core games, Price it abour 400 bucks but have hardware thats actually worth it, and then leverage its core games to a more mature audience. It would do very well with that.

 

[Fredrik]

pretty much - but they are hindered by the tablet, ancient Power PC architecture and computer style GPU, BR drive and physical distribution as the main business model.

Maybe so, but I guess they were aiming for both markets, both small downloadable indie/tablet/VC games and traditional retail AAA games. And the latter is what's failing right now. But personally I still think WiiU could be successful if Nintendo get started with a proper marketing campaign. It's been 8 months and I still haven't seen one single WiiU ad from Nintendo. And it gets tiny shelf space at stores too. Of course it fails. WiiU ads should be everywhere, bus/train stations, sports arenas, magazines, TV, cinemas, radio, website banners, google ads, etc etc etc.

 

[Chittagong]

I can see where the OP is going with this, but I just have to question why this system would have to be WEAKER than the Wii U is? Wouldn't it make more sense to just repurpose the Wii U hardware (while adding a bit more RAM and higher clock speeds)? It'd probably be less R&D costs to do so also.
.

The main reason is that PowerPC is an architectural dead end. Reducing it would actually prove very costly and probably impossible (which is why Apple went Intel). Compare this to a situation where Nintendo can take pretty much an off the shelf octo-core ARM SOC with Open GL graphics support and media functionality for a few quid. Going with IBM and AMD was such a colossally bad decision it just blows my mind.

I think iPad level of power is all Nintendo needs to do compelling games at home.

 

[Carpe Libertatem]

Isnt that essenially an OUYA with a wii remote? Nintendo just needs to make a system based off a normal control, put out some decent core games, Price it abour 400 bucks but have hardware thats actually worth it, and then leverage its core games to a more mature audience. It would do very well with that.

It's an Ouya (I guess), except it, you know, has Nintendo games on it. That's a pretty big difference between this theoretical "Nintendo TV" and the Ouya.

 

[Snakeyes]

Isnt that essenially an OUYA with a wii remote? Nintendo just needs to make a system based off a normal control, put out some decent core games, Price it abour 400 bucks but have hardware thats actually worth it, and then leverage its core games to a more mature audience. It would do very well with that.

Exactly. All they need to do is go back to the basics.

Cheap handheld + competent home console. Make a genuine effort to rebuild third-party relationships. Invest in new IPs. Done.

 

[Azure J]

I'm kinda always against thought processes that boil down to "this [Wii U] is Nintendo's last home console, where do they go now" honestly. Give me empirical evidence that suggests as much first and doesn't rely on the "mood" of current day versus their own inner workings and I'll concede that much to you.

With that said, people are already upset that Wii U doesn't offer enough of what makes consoles worthwhile and the idea to fix that is to entrench yourself in a weird Apple TV/Roku/Wii family half-way house? Seems weird to me.

 

[Snowden's Secret]

I don't think we've even established that Wii U won't be successful.

That said, neat ideas in the OP but not sure I could see Nintendo going in that direction.

 

[The Horror the horror]

Nintendo has great opportunity to showcase its next-next-gen console ahead of the competition without being perceived as abandoning the system early. While everyone thinks the much-talked about handheld/console hybrid will be the successor to the Wii U, I think it would be in Nintendo's best interest to make it the successor to the 3DS, which was released a year earlier and will approach the end of its lifespan sooner than the Wii U and other systems.

Nintendo really needs to go all out on their next handheld, not necessarily their next console. Handhelds, mobile devices, and other portable devices are the future, and so it's imperative that the 3DS's successor can legitimately compete in not only that market, but in the console market as well. Sound hardware, new tech, and most importantly a video-out feature that will not necessarily canabalize the Wii U since it'll play games that can't be found on consoles any way.

The 3DS's sucessor will tell us the future of Nintendo.

 

[Kai Dracon]

It strikes me that, to a degree, the OP scenario describes what might have been the Wii itself if Nintendo had been more progressive and sophisticated with its online elements. For all the Wii is firmly dismissed as a fad and not a "legitimate" device, it seems its real downfall was for a wholly different reason: it was not flexible enough to adapt to where the expanded audience went. Wii started the party, then mobile, tablet, online, streaming, etc, took over.

 

[Chittagong]

I have serious doubts that Nintendo could build ever again a technically advanced console and support it with software - the game has grown just too big. The architectural understanding required to pull together something as elegant as PS4 or Xbox One is not something they have demonstrated since GameCube. They seem to be unable to scale up their software teams to support big scale productions, too.

The only other path I can think of is acquiring Oculus Rift. It would create a new style gaming experience that completely sidesteps the competition, and does not require huge productions:

http://www.youtube.com/watch?v=GoQ0OXJCbaE

 

[evilromero]

This would have been a better solution than Wii U in my opinion. They could have focused more on raw system power and a better Wiimote rather than dividing the power between system and tablet.

 

[Snakeyes]

What's so elegant about the PSBone? They're basically the simplest console designs we've seen yet.

 

[kurbaan]

I have serious doubts that Nintendo could build ever again a technically advanced console and support it with software - the game has grown just too big. The architectural understanding required to pull together something as elegant as PS4 or Xbox One is not something they have demonstrated since GameCube. They seem to be unable to scale up their software teams to support big scale productions, too.

The only other path I can think of is acquiring Oculus Rift. It would create a new style gaming experience that completely sidesteps the competition, and does not require huge productions:

http://www.youtube.com/watch?v=GoQ0OXJCbaE

Im not so sure about that. The way the consoles are going they are pretty much advanced but integrated PCs now.

I can see Nintendo just basically making a PC on the cheap with X86 and use their OS. And if they dont have the expertise in house there are so many companies that can help with this

 

[Le Singe]

With that said, people are already upset that Wii U doesn't offer enough of what makes consoles worthwhile and the idea to fix that is to entrench yourself in a weird Apple TV/Roku/Wii family half-way house? Seems weird to me.

Yeah, not very interested in this idea personally. The negatives of tv boxes is their weak gaming experience but it seems that this proposal is limiting and weakening the games that could be on it by making them all cheap small scale games. Nintendo hasn't had a lot of big third party games for years now but to totally retreat from them and to go even further seems crazy.

I know some people say that really only Nintendo's IPs matter on Nintendo consoles but I don't believe that myself. The more Tiger Woods, Call of Duty, Guitar Hero' etc games on their system the better.

 

[kpeezy]

I feel like this thread is overdramatic. There are plenty of games coming out for Wii U in the next year and it's also the cheapest console on the market.

Also: http://vgsales.wikia.com/wiki/NPD_February_2007
PS2 outselling PS3. It's not the end of the world.

 

[Tuck]

OP, you're basically telling them to stop focusing on games, which is sort of the only thing they're good at. If I wanted a Roku, I'd buy one.

 

[The Abominable Snowman]

This would basically push Nintendo into the Wii corner that they kind of need to get out of right now. I'd envision a more powerful box that focuses on traditional gaming, motion control gaming AND second screen gaming. Maybe even combining portable and home console (Better than the Wii U did. lmao)

But I wouldnt shoehorn them to a discless system when they already have problems getting 3rd parties.

I feel like this thread is overdramatic. There are plenty of games coming out for Wii U in the next year and it's also the cheapest console on the market.

Also: http://vgsales.wikia.com/wiki/NPD_February_2007
PS2 outselling PS3. It's not the end of the world.

Wait. What? What does this have to do with anything?

 

[Minions]

I feel like this thread is overdramatic. There are plenty of games coming out for Wii U in the next year and it's also the cheapest console on the market.

Also: http://vgsales.wikia.com/wiki/NPD_February_2007
PS2 outselling PS3. It's not the end of the world.

Well it may be getting more games, however it will soon be competing with twice the competition... PS3/PS4, 360/One etc. It is just a little worrying that huge ($100+) price cuts in the UK have done little to nothing currently.

 

[RedSwirl]

What the OP is describing basically sounds like a standard console right now, but much cheaper, with simpler controls, and without a disc drive. If Nintendo did that and played up the "cheap and accessible" angle with a very clear message and good content it could work, especially if they grabbed up indie support and quickly got a lot of good content on there.

I don't think it would be $99 or even $149 though, not when Nintendo's selling a 3DS that's $199. I imagine $199 with a hard drive would be the ideal price for such a product. I imagine Nintendo would also sell a companion handheld system (the successor to the 3DS I guess). If they were smart both would have the same control interface and more importantly run all the same software so that all games are essentially cross-buy. You might ask why Nintendo wouldn't just make one handheld that can connect to a TV, and I'd say Nintendo probably still wants two hardware revenue streams.

I think the overall idea of migrating one of the mobile OSs to the TV is eventually gonna happen. I think the full iOS is gonna eventually make the big move to the living room and when that happens that whole market is gonna blow up. I think if Nintendo made a machine that embraced the same kind of software development and got all that support, they could survive in that market with the advantage of their first party and legacy software.

I see two issues though which have already been brought up: 1) Nintendo isn't quite ready to completely abandon retail yet. They believe in digital but they're still in pretty deep with retail, especially in Japan I'd imagine. 2) Nintendo still wants to charge $50 for their own full games. They've been adamantly against the $1 game. They'd really have to make people believe that content is worth $50 on a digital marketplace.

Also, I'm not sure if the timelines would match up in terms of production schedule. The OP assumes the Wii U is already dead in the water, but even if it is Nintendo can't just develop new hardware right off the bat. I think the earliest we'd possibly see another home console from Nintendo is 2016. A lot can happen between now and then. Apple or Google could finally crack the living room in that timeframe. The PS4 and Xbox One could become popular living room devices.

I definitely agree that Nintendo needs to drop any pretense of competition with PlayStation and Xbox, at least while both of them are still in the game. I don't think they're unable to manufacture a console on par with them, just unwilling because that whole approach to video games goes against what Nintendo stands for. Perhaps if one of them left the game after this generation Nintendo could see an opportunity, but it's impossible to predict that right now.

I agree that Nintendo needs to totally set itself apart and do something that plays to its strengths. It's just a matter of what. Whatever it is I still think the current indie industry us very compatible with what Nintendo is trying to do.

 

[Snakeyes]

Nintendo really needs to go all out on their next handheld, not necessarily their next console. Handhelds, mobile devices, and other portable devices are the future, and so it's imperative that the 3DS's successor can legitimately compete in not only that market, but in the console market as well. Sound hardware, new tech, and most importantly a video-out feature that will not necessarily canabalize the Wii U since it'll play games that can't be found on consoles any way.

The 3DS's sucessor will tell us the future of Nintendo.

Ehh, I'm not so sure about that. Nintendo's handhelds prior to the 3DS have been successful because of how affordable they were. For a dedicated handheld in a smartphone world, a low, impulse-buy price is more vital than ever, and that's not gonna happen if they go all out.

 

[Xellos]

I can see where the OP is going with this, but I just have to question why this system would have to be WEAKER than the Wii U is? Wouldn't it make more sense to just repurpose the Wii U hardware (while adding a bit more RAM and higher clock speeds)? It'd probably be less R&D costs to do so also.

This is what I was thinking. If Nintendo were to go this route, it would be easier to repurpose the Wii U instead of moving to an ARM processor. Wii U without the disc drive and gamepad would be tiny, quiet, compatible with Nintendo's existing games, software and tools, and more than capable of powering this kind of device.

That aside I think this is a good idea. Nintendo tried to please the Wii and 360 crowds with Wii U and wound up getting neither, and the gamepad has been a flop. They need to refocus. $150 would be a decent price for a Nintendo + indie + app box. The biggest challenge for Nintendo would be coming up with a good OS and app service. They've dabbled in apps with Wii (news, weather) and Wii U (TVii), but the results haven't been great. They'd need to do a whole lot better for a product such as this.

 

[Law Abiding Stranger]

Business wise this seems like a good idea but it would backfire as a gaming machine.

Yet again the focus would be on people who are probably not really that much interested in gaming but rather cheap entertainment box.