How Can Nintendo's Next Console Possibly Compete?

In today's gloomy and doomy Speak-Up on Kotaku, commenter MtlAngelus wonders how Nintendo's next console can possibly stay competitive in today's gaming market.

Let's speculate, shall we?

There's rumours of a Wii 2 going around, and it's certainly possible that such a thing might be announced soon(ish), considering that the Wii is basically a zombie right now. My question is, how can Nintendo actually make it work?

It definitely cannot be underpowered. An underpowered machine by Nintendo will not get an audience anymore. Gamers will stick with their PS360, and the average person will stick with their Kinect/iPhone/iPad/Wii. Even if they find a new holy grail of whatever magical thing, I can't see it being a runaway success because there's simply too many "magical" things out there right now. A lot of people bought the Wii because it did something new, in a time where not many things did new things. And that environment is gone now, with things like the iPad/Kinect/iPhone/etc capturing the imagination of people.

So, will it be something that will blow away the 360 and PS3? I... don't see that happening either.
First, Nintendo isn't the type to release really advanced, expensive hardware. It's just not their thing. But even if they did, it's not a guaranteed success. The problem with being really ahead of the rest this days is that big games cost a lot of money to make. Companies like to make multiplatform games for a reason. How many companies will choose to gamble a ton of cash producing a game that can run on only one console that is just starting to get an install base (plus maybe PC), versus gambling that money on a game that runs on all consoles(and maybe PC)?

Ergo, you'll be seeing mostly ports of PS360 games, just like the PC does right now. At least for the first two years. Sure, they may run slightly better, or feature slightly better graphics. And it may have a few exclusives. But is that enough to warrant the purchase of an entirely new console for people who already own a PS360?

So, that leaves us with a third option: A console that is on the same level as the PS360. But that comes with the same problem of getting people to buy it in the first place. The only thing going for it would be Nintendo exclusives. But I ask again, would that be enough? Especially when it would be arriving five years later than the competition?

I just can't see how Nintendo could manage getting back into the race at this point.

What do you people think?

About Speak-Up on Kotaku: Our readers have a lot to say, and sometimes what they have to say has nothing to do with the stories we run. That's why we have a forum on Kotaku called Speak-Up. That's the place to post anecdotes, photos, game tips and hints, and anything you want to share with Kotaku at large. Every weekday we'll pull one of the best Speak-Up posts we can find and highlight it here.
[Concept art via T3]