I disagree. There is a lot of money to be made in that direction. With the increased focus on online, there'll be a lot of revenue flowing in. The direction Nintendo is going is where there is nothing. It's better to fight for something than be left in that corner with nothing.
Casuals aren't so easy to bring in right now. Wii was fortunate enough to be releasing before the smartphone explosion and the the success of the iPhone changing everything. Targeting casuals and Nintendo fans at the expense of everything is a short-sighted move. It won't work as your core audience. Nintendo fans are a minority. They're pointless in the grand scheme of things. Trying to gain the casual market is a much harder task now than it was back in 2007 too. There have been huge changes since then. It's easy to say 'you should target the casual market' as if there are a tremendous amount of ideas but it's much harder to do well than anything else. Making another cheap console to target the casuals is a short sighted move, just like it was relying on this gimmick where they've managed to isolate themselves even further.
They had seven years and an early release. They should've launched a comparable console with similar architecture, focused on their online service more, and tried to eat into the potential marketshare of the future Xbox One and PS4. It's not like Microsoft and Sony are so powerful that people are going to wait just for them. Had Nintendo created a generational jump themselves, with more involved support from third parties, plenty of people would have jumped in.
They're trying hard to differentiate themselves and making the Nintendo brand even less relevant in the process.
It's not a difficult concept to grasp, or shouldn't be for a business. The industry is moving in one direction. Move with them, and tweak things to change your brand image if you like. That, at least, ensures some things for you and makes it less of a gamble. Don't bloody jump off a cliff on the other side.
The Wii was understandable. It was necessary and it worked out fantastic. It put them in a strong position. But, somehow, they managed to mess that up by trying another cheap gimmick.
Forget the PS4. If a console like the Xbox One launched in 2012, there'd be a lot of interested people. It's a whole year where there is nothing like it. There is a clear distinction to be made too between it and existing consoles like the PS3/360. Third parties who are already moving in that direction can also create cross-generation titles too at a lesser expense, whilst also getting ready for the upcoming Microsoft/Sony consoles. It's an easy move to gain market share and build a new brand image upon your existing one.
Nintendo just goes out there with another gimmick, a stupid name, no multi-media functionality, poor online/accounts system, and isolates itself further from the general gaming industry. It's no surprise the Wii U is struggling because they made every mistake possible with it.