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Ah, Nintendo. My first true and only love. They single handedly revived a dying industry, fell to the bottom of the barrel, and unexpectedly rose to the top again just within the past 3 years. Now, for better or worse, the Wii is here to stay. Both gamers and our culture have latched onto it, and it's reign over this generation is non-disputable. Yet still, most "core" gamers have abandoned the white box. Is it the honeymoon over for Nintendo, or is this just the beginning?
I consider myself a Nintendo fanboy. I'm a lover of all systems, but there's nothing like the Big N that gets me all worked up. I bought the Wii at launch and loved it....up until about last year's E3. Wii Sports 2? Wii Music? Animal Crossing? These were the AAA titles I had to expect the next year? Oh no. Nintendo let me down big time. Third parties had already jumped the shark, figuring out early on they could make a quick buck with cute minigames (see Carnival Games.) Where was a hint of a new Zelda? A new StarFox? The return of Pit? My dreams were shattered, and my Wii sat alone for a good number of months with no power. But I haven't given up.
The Wii isn't over. I still believe in it's potential. I know the next Mario and Zelda and hopefully other franchises will blow me away. I also think the Wii is going to stick around longer than anything else. While we may see a PS4 or Xbox360-2 (?) in the next couple years, Nintendo really doesn't have to do anything. They're still selling like crazy. If it ain't broken, don't fix it. That's not to say Nintendo should rest on its laurels. 2008 started well. No More Heroes was a delight. Super Smash Bros. Brawl wasn't far off, but after SSBB, the year sucked. Mario Kart Wii disappointed. WiiFit wasn't worth the hysteria. And did we really need another Mario baseball game? Here's some advice Nintendo: Lay off the peripherals and gimmicks and give us good games. Super Mario Galaxy relied very little on motion control and was fantastic. Zelda used the Wii Remote in a way that was fun and a little cheesy, but not annoying or distracting. Think outside the box. The Blue Ocean strategy worked....now get back to gaming. 
They rode the line wonderfully with the GameCube. Excellent games with an attempt at connecting to the non-gaming community, but it was shunned in the shadow of Sony and Microsoft and wasn't given a decent fighting chance. Nintendo was on the verge of going the route of Sega, and would have broken many a heart. They slipped up with the N64 by sticking with cartridges. They provided Sony an in to crush them by failing to agree on the PlayStation add-on for the SNES. Years of minor mistakes that cost them gravely, now are made up for by the smash success of the Wii. I'm glad for them, but don't want it to go to their head. That's how we got in this mess in the first place. So even though my Wii has only seen the light of day a few times in the past few months (World of Goo, Tatsunoko VS Capcom) I'm still okay with it being where it is. I haven't given up hope. 2009 is full of opportunity, and hopefully some wonderful surprises. Games like MadWorld and The Conduit are proving that third parties aren't giving up either. Like Wilson Phillips, we just need to hold one, for one more year.
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One part is the technical aspect. That has hurt them with some developers who like to stretch their legs and want to work in HD.
Another is the nature of Nintendo themselves – the long time Ninty fans love their in-house games to the extent that it seems to almost hoover up the air around any other 3rd party stuff.
By 3rd party stuff, I mean the stuff that core gamers typically care about.
Nintendo almost seems like they want to be the Disney of the game industry now. Disney makes gobs of money and is very successful witha happy, shiny, kid-friendly image. But apart from the occasional Wall-E (i.e. Super Mario Galaxy), I really don't care to watch Disney movies, myself. I'm glad they exist, but it's not for me.
It's not a matter of "holding on one more year". They've shifted focus. I think this is the first year in a long time that there hasn't been a new Zelda home console game, correct? And even TP was a GameCube port. They don't care because there may not be as much money in going after us.
I say "may not" because I still believe that a majority of Wii systems sell to people who a) never would have bought one of the other consoles, and b) genuinely just wanted Wii Sports. To these people, they've bought an electronic version of a ping pong table. If it does other stuff (other games), great, but this is why they bought it: to play Wii Sports when friends are over. And yes, the rest of the time it collects dust.
Meanwhile oldskool Ninty fans like yourself are left holding the bag so to speak, marvelling at their financial resurgence but at the same time wondering where the fuck the old beloved Nintendo has gone to.
Stuff like Mad World and No More Heroes seem to be aberrations. I doubt you can count on many more titles like that, despite the huge installed base, for the reasons mentioned above.The Conduit just looks like wishful thinking to me, a fleeting glance at what the Wii platform could have looked like, if Wii Play wasn't so much more lucrative.