Truthfully, nobody knows how any game will perform. But they are expanding while others around them close, so I'll put it out there that they're right not to adopt this "West Way is the Best Way" mentality which is plaguing the industry. I'll also put it out there that 8th Gen engines are scalable, so they had to find a balance between having a console capable of running them (they have it), and achieving an accessible price (they have it). I believe that backwards compatibility was important, not only for those upgrading from a Wii, but because most customers wanted it (I don't mean NeoGAF here; they're irrelevant). It was also in their interests to keep the costs of game development down - I agree with all of this, as I believe that a giant leap and a continuation of what we've had between 2006-2012, and into 2013 is not in the industry's interests.
The balance is only surface deep as you state the case - it means close to nothing as the result stands. Because in order to get a game on Wii U, you still have to make deep compromises, same as you had to for Wii. Just because the Wii U is 'relatively' cheap - i.e., a system that came in at $299.99, it doesn't mean much, because
they are already losing money on every Wii U sold, and the whole reason they did
that was because they wanted to come in at a price they thought would be attractive to consumers. Instead, consumers still rejected the platform, it is now extremely difficult for Nintendo to have wiggle room because they have a prohibitively expensive controller that most of the market has already largely ignored for the rather tepid "innovation" it actually is, while gaining none of the benefits Wii had from its novelty.
So, in short: they're losing money on every system sold, the reason they are losing money is because they wanted to make a price competitive system that sold fast earlier (which did not happen), and the reason that the Wii U system has the technical disadvantages it does against PS4 and Xbox 720 was because it wanted to try to gain attention with a novelty controller that most people don't care about that made pricing strategics more complicated due to how expensive it is. To be even shorter: they literally failed to be able to capitalize on every a single aspect of their strategy for Wii U, and now because of that every one of these approaches is now circling back to hurt Nintendo instead. That's a pretty big problem no matter how you swing it, I think.
Also, I'm not sure what you're implying the "West is the Right Way" strategy actually entails, because Japanese studios across the board spent half of last gen languishing to accomplish even the most basic competence in next-gen development, unlike the West which had a firm grasp on what developing for these platforms meant. Nintendo could have spent time investing in learning so they could avoid doing the same thing themselves, but now they're
complaining about being understaffed, shuffling around employees to complete Wii U projects thus taking them off other projects, having trouble with next-gen development. This doesn't sound like they were 'expanding' when they should have been - this sounds like they're admitting they had no clue whatsoever how to approach next-gen development, like so many other Japanese developers, and for whatever reason they had no idea that they should have been spending this time and money learning from other Japanese developers on what
not to do.
Nay, Nintendo should have been using its warchest for meaningful futureproofing investments, but they failed to do so. And so now they reap the problems.
I don't accept that they have to make the same console as everybody else, or to conform. They had ambitions for the GamePad (Nintendo Land, Game & Wario and Wii Fit U were just a few examples of gaming concepts, while others may see a 'console version of DS', for want of another expression), and Off-TV play is appealing for many. While a game can be taken to its window, it also continues with the idea of families and friends staying in the same room and enjoying it together or individually.
Just want to illustrate the difference between a personal desire and an argument based on the landscape of the market at the moment. This paragraph of yours is essentially your projection over what the appeal of the Gamepad is. The market, on the other hand, has shown the most tepid response imaginable to the device - because it's hardly an innovation at all, of course. It's simply an extension of the two-screen concept started on DS, something that already found its best expression in a handheld ages ago. So while I am not arguing that it may have the merits you say it does (It hasn't done much of anything special for me yet), I am saying the market doesn't give a damn. Which is really what needs to happen in order for a special device like that to really take off and carve out a meaningful niche in game development.
As I said earlier, Wii U is doing extremely poorly - to an unprecedented degree. That's always what people don't realize (or don't like to admit). Wii U isn't merely being doomed and gloomed because it's convenient and it's Nintendo, it is being followed by the negativity cloud specifically because it is doing worse than almost any major platform release in living memory save Vita. So, what all this at least partially suggests is that the concepts are not enough on their own to draw the fanbase Nintendo wants (a Wii-like fanbase, surely), and so they are either going to have to create that buzz with a new kind of marketing (which I don't think they have in them, given their atrocious marketing for Wii U so far) or with a new type of game (which I believe their 'old country try' was in Nintendoland, and we see all the consoles that ended up moving. Mario, Zelda, Metroid will not be the saviors Nintendo wants, much like they weren't for Gamecube).
A lot of people on here say that too much was spent on it, but nobody knows how much it cost to make, so I reject that. Some just hate it without even trying it. Oh, and it can support 2 GamePads - Reggie confirmed that at E3 2012.
This doesn't even require understanding the cost of components. All it requires is understanding that
Nintendo actually charges $140 for the Wii U pad. That's only a pittance less than a 3DS is these days. So you may say 'nobody knows how much it costs to make', but everybody knows how much it costs to buy, which the vast majority of folk would say is "far too fucking much."
As for the "reggie confirms" comment, my point isn't that it could support two gamepads or not, it's that the Wii U will forever be relegated to an essentially one pad future, because most people are not going to spend $140 for a second Wii U pad, and most developers are not going to make games that require such an option because the Wii U userbase is already catastrophically small without further segmenting it into pieces between those who have one Wii U pad and those who have two. So what you have is a system that basically requires controllers from another console that doesn't even come with every Wii U in order to function in its basic 2 player capacity or more. This is already immensely confusing for consumers without adding in thirteen peripherals to keep track of.
Also, they are doing many of those things you said (expansions, collaborations... Iwata has taken up a position at the North American division, so let us see. Also, they're publishing Bravely Default: Flying Fairy - this tells me that they are learning from the Xenoblade/Pandora's Tower/Last Story affair, and for fans in North America, let us hope that something like this doesn't happen again, or so frequently in the future). Being a compassionate conservative company isn't the same as being 'stingy'. Some might argue that it's one of the healthier positions to adopt in business - There's spending money to make money, but at the same time, there are no guarantees, there's cutting your coat according to your size and living within your means. Not one person was put out of work (can't say that about EA or Square Enix, or about Sony, who are indulging in power races while laying off 10,000 people). I would say that there's a case for a stronger European presence, but I trust that they are all trying their best. I also believe that Iwata should have every chance to realise his vision, and that ultimately, they'll be better off for it. I'm aware that some on here are calling for his head, but I strongly disagree. Certainly, I don't believe that they should take lectures from NeoGAF on how to run their hugely successful business.
Let me illustrate a simple point as a gamer: what does it matter if Nintendo is not bleeding employees this second if nobody is buying their consoles, nobody is making games for their system and Nintendo's own strategy is an admitted failure by the companies heads? The answer is 'it does not matter much at all.' It just means they still have their warchest to burn through, since they were so busy NOT using it to make meaningful investments with game development and expansion. Taking on a publisher role for some obscure Japanese title, while fine for you and I and some neoGAFers, is ultimately completely meaningless as it relates to actual 'expansion', because that's about as cheap as one can be when it comes to that sort of thing. It cost a pittance to publish a game and perhaps providing translation services compared to, say, buying studios outright or expanding team sizes (which Iwata, once again, has already said is a huge problem - essentially this amounts to little more than admitting to a failure of investment). No company sitting on the type of money Nintendo was sitting on has an excuse for this sort of failure.
The industry changed right underneath Nintendo, and they were too busy playing it safe to bother noticing. And now they are playing catch up with a system so critical that there appears to be almost no solution for it.
It is far past the time people stop blaming everyone other than Nintendo for their failings. They are where they are because they did not want to change and kept dismissing real trends in the industry. They stuck with what they did until the market no longer wanted it, and the problem I see is that they simply did not have a compelling idea to follow it up with. When you compound that with a huge mismanagement of potential investments, it just adds up until a damning whole.
Also, I want to underline in this comment of yours at the end how you seem to have a habit of collecting neoGAF as a 'single entity'. There is no neoGAF hivemind. There are just as many people on neoGAF that have fantastic business acumen (of whom i can assure you Nintendo damn well
better start taking like-minded advice from if they want to survive another 100 years) as there are people with no clue how things should be run. There is no collective.
So as I said earlier, they have to spend money to make money. This is not to imply there is definite success from that, as it matters when and how you spend your money. There is never any guarantees in business. A business who will tell you that you are
guaranteed a return on any particular investment is one that is trying to run a scam. If Nintendo wants to maintain its current size and not lay anyone off until the industry crushes them to death, that's an option too of course - then those people can look back at how they were not laid off for a few extra years with great pride as the company falls further and further behind its competitors until there is no way at all to turn things around.
Such an ideal can only work if Nintendo had zero competitors. Then Nintendo could perhaps play it safe and drag things out and horde the money they made until Kingdom Come. But they don't. So the less money they're willing to investment, the more Microsoft and Sony can capitalize on any particular advantage to move yet further ahead in the console space. It's already pretty clear Nintendo lost the third party war and the systems aren't even out yet, so I'd say they have to do something if they want to stay relevant in the console space.
Say what you will about 'botched' launches; I disagree on this, too. The 3DS's main problems were that it launched without a Mario game, and that the DS still had life in its tail end. Of course, a price cut CAN help, but that wasn't the primary reason for its turnaround. I believe that when Nintendo said they had learned lessons from the 3DS, they meant in terms of having more games available in the launch window for the Wii U - they delivered on that side, THEN launching with a Mario game. If you remember E3 2011, NSMBU was there in raw form as NSMBMii (I hate that this game gets called a 'lazy' effort by some when it has some of the tightest level design in all side-scrolling Mario games, and had been in development for quite a while). At E3 2012, Reggie said that many fans want a Mario game at launch (His words were "You've Gotta launch with Mario", or something among those lines). So, he revealed what you now know as NSMBU - 3D Mario isn't here YET, because moving into HD game development hasn't been an easy or smooth transition, and they want it to be something very special. I'll keep mentioning the point about the transition, because the Internet hasn't allowed for that fact. To my mind, they addressed what they believed to be the main concerns. One can be critical again about what they should have done, as they have hindsight on their side, but they addressed WHAT THEY BELIEVED to be the main concerns - that is the point here, not whether they were right or not. I feel that they were right to a point - As brilliant as NSMBU is, it is NOT the type of game that makes one say "I would spend £250-330 and buy a Wii U to play this!!". A 3D Mario, while not as popular as the NSMB games in terms of sales, is the type of game that shows noticeable steps from the last flagship game, and with the exception of Sunshine, they help people to understand better why they are paying more to own or upgrade to the new console. NSMBU is more of an 'evergreen' title - That is to say that when more people own a Wii U, they will most probably buy that game at some point as it would be on their 'must play' list. It will continue to sell during the Wii U's life-cycle. Had it been released later, as NSMB2 on the 3DS was, some might still have bought a Wii U, but at that point, there would've been other games in the console's library, and sufficient reasons to bite.
I don't know how you would disagree with the 3DS horrible start - it was so bad they had to drop the price in an essentially unheard of aggressive strategy from Nintendo for the system. It was the miserable system launch lineup combined with the expensive nature for a gaming dedicated handheld combined with a less than original design document that put it where it did.
And even with its regained footing, I would say Nintendo is on borrowed time in this arena - the age of gaming dedicated handhelds are slowly evaporating everywhere other than Japan, because the number of people who care enough about gaming to really want a device dedicated to only that function are a fast diminishing group. They can just get gaming as an addition to their phone, internet, app usage on their smartphones and tablets. Gaming is simply not important enough to have this position for people in the face of new emergent market trends. Therefore, it is in Nintendo's best interest to adapt and invest in new avenues of potential revenue. And to that, it takes big thinking and big investments. It does not take what everyone expects - more Mario and more Zelda and more Metroid.
3D Mario exists on every platform since N64, and yet the only one that achieved status one success for a console was the Wii. Clearly, there is no correlation between 3D Mario and success of a platform, unless of course you think Nintendo is fine with always being in distant second or third place as long as they're squeaking out some thin profit. Of course, I don't think Nintendo themselves were happy with such a situation considering the drastic changes they underwent with DS and Wii, but it's your opinion ;P
I believe that the launch was fine, at least, it did as well as it could've done in the current circumstances. Iwata had no control over Rayman Legends being delayed, Crysis 3 and Aliens: Colonial Marines being discarded or other titles not announced for the Wii U - Had those events not happened earlier in 2013, any talk of 'droughts' would have been far less pronounced. Pikmin 3 is an unfortunate delay, but I would rather they made the best game they can. Given that all but one of those events, if that, were beyond his control, my verdict is that he delivers. Also, writing it off before they've played their cards is preposterous - Currently, It has no 3D Mario, Mario Kart, Wii U Zelda, Donkey Kong, Metroid, Kid Icarus, Wii Fit U, Wii U Sports, Wii U Party, Brain Training, Animal Crossing, Pokemon, Nintendogs & Cats, Pikmin 3, Kirby, F-Zero, Starfox, Bayonetta 2, The Wonderful 101, SMT VS Fire Emblem, Retro or Monolith Games or Smash Bros.
Well the only quantifiable way we have to show how decent the current lineup is (including the horrible launch lineup) is to show how well Wii U is doing. Otherwise it's just my opinion on how bad the launch was. And as we can see from how shitty Wii U is doing, most people think the games lineup and launch were terrible - at least, bad enough to NOT invest quite yet. And of course, if it was games alone... but it was also the slow-ass OS and shit. Not good.
To me, your final point with a list of endless franchise whoring illustrates another point I like to make. These are not going to save Nintendo. Nintendo needs bold new ideas to drive innovation and new customers, not Mario, Zelda, Metroid, Donkey Kong, Nintendogs. These are old ideas playing to the same old customer. Other systems of Nintendo have had many of these, and yet have been distant second or third place.