The problem is understated I think. People have a notion that if they just changed x the company would be once again on top of the world. Just change the pad, just change the online, just tinker with the price, just release some obscure franchise from 20 years ago, just release a new console...I think the problems run far deeper than that. Nintendo has a major image problem with a lot of the people who drive this industry, the long term, devoted gamers. They could make fixes but it's going to take long term change before any improvement becomes apparent.
Mario and Zelda aren't doing it for a lot of people any more. Sure, both are iconic names, but so what? People are fed up with them in every game, from platforming to football to racing you can't get away from Mario. Even the puzzle games take place in Mushroom Kingdom.
Now, if they had the third party on board, it'd be fine. Because, yes my blu ray player plays Disney classic Blu rays but I can ignore them because they're not for me and my blu ray also plays classic britcoms and star trek. If all my blu ray player played was classic Disney blu rays, if Mickey mouse was shoehorned into every genre from courthouse dramas to sports films, I'd go elsewhere. The trouble is, they have for one reason or another lost faith with the third party, and that wont come back overnight, so they are stuck with this problem until they develop some new IPs, which wont become iconic overnight either. They have to be up to speed with others, and in genres like FPSs, RPGs and many others they have shown zero chance they can do it in recent years. HD has come along and they are off the pace there. Gamers who want the third party don't associate it with Nintendo, so they don't buy the games that do come along. Hence, the third party wont come along overnight even if Nintendo did decide to play ball and convince them so.
But then, they are perceived as being cheap, because they are. Their consoles are, to be frank, out of date, and the thing is, the gimmicks are not often useful to the gamers. Motion controls have not taken off. They were a fad. The screen thing was tried on the Dreamcast, and it was apparent to me then, that unless humanity evolves two sets of eyes, you can only look at one screen at a time. It might be interesting for off-screen play and as a companion but that's it. Sony got this, because they included such functions in the vita, but they are an add on for people. The Wii u is awfully overpriced for what it is. Ditch the controller, you still have a console way off the pace with no third party.
And the online, they have to copy the others, but the people to whom third party is the most important thing or even just important don't currently buy it on Nintendo and don't need to change over. So getting them back will be a massive challenge. One store, one account, achievements, full rooms packed with competitive gamers, one of these isn't as quick a fix as the others.
Then you have this perception that they are for kids. A family friendly console. Not a bad thing in itself but then this doesn't mean you can't be diverse and cater to everyone. The advertising is fluffy and childish, when it actually appears. The games can be complex and intricate as you like but they are cartoony and don't always appeal to everyone. People can argue back and forth about maturity but the fact is a lot of people are turned off by it.
Basically, every major step they need to take is a long process of amassing faith back in them from people who have completely lost it over the years. And it's not simply enough to do as well as the competition, because people are happy with what they have. Nintendo have to outdo the competition. To gain faith and start seeing customers jump ship en masse they need to convince people they can't miss out on Nintendo. Can they do it? I sincerely doubt it. The fanboys may protest but it's not the fanboys Nintendo needs on board. They have them no matter what they do and they will argue vociferously that things don't need to change.
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