>Particularly in light of all that promise and potential that was squandered (or possibly illusory) in the Wii's original incarnation.

...the what?

What exactly was squandered in the Wii's original incarnation?

http://en.wikipedia.org/wiki/Wii

>As of June 2011, the Wii leads the generation over the PlayStation 3 and Xbox 360 in worldwide sales,[7] and in December 2009 broke the record for best-selling console in a single month in the United States.

What more could you possibly want?

>When I saw the controller, my first thought was "$500".

Probably not. Nintendo has never launched a console at $500. The Wii was noted for being cheap, and I really, really doubt they'd launch this without being able to make it at a similar price point to their previous offerings.

>Sure, the Wii U looks impressive. But no Blu-Ray or DVD support? Really?

I sure as hell hope not!

...okay, maybe not that emphatically. Still, there's a Blu-Ray player built into my TV, and as far as I can tell that's becoming common. I don't need a peripheral to do that for me, and I certainly don't want them to tack on an extra $50 for a capability I already have.

Besides, who uses DVDs anymore? It's all about Netflix.

>As Microsoft and Sony move ever closer to evolving into that mythological set-top box that does it all, how do you justify buying a presumably expensive console that does just one thing anymore?

Because I don't want a set-top box that does it all. It's bad enough (but acceptable) that video games are closed-source; hopefully my media doesn't have to be the same way.

>Mario and Zelda brands no longer sell systems in the long term when the competition is so stiff,

...alright, my Zelda fanboy is showing, but Skyward Sword is probably going to make me shell out for a console and I haven't bought one in a decade (I habitually use my friends' consoles, though).

>They know this, which is why they bend over backwards to assure everyone that they have the support of firms like EA, Activision, THQ, and Ubisoft. But when you're releasing behind-the-times hardware that has features and peripherals completely different than competing platforms, it makes the prospect- and return on investment- of developing much riskier.

This I agree with, but on a slightly different point than the author.

Last I checked it wasn't close to easy to get a license to develop games for the Wii or 3DS. You have be a big company to afford a site license for the dev kit and you need specialized hardware to load your stuff onto the system. Nintendo doesn't need EA and Ubisoft; for one thing, EA sucks. Nintendo really needs to open up to independent developers. This is where Microsoft really shined with the Xbox ecosystem, obviously bringing some of their desktop expertise to gaming.

Forget weirdness worries -- indie devs love developing for unique hardware and odd platforms. Independent game developers thrive on the iPhone App Store. They also built the Facebook application ecosystem. By contrast, large, established firms shy away from developing for unique hardware, because of the uncertainty involved.

The proper strategic direction for Nintendo is to stop chasing EA and learn to open up to independent game developers. Even Apple, the infamously elitist company's infamously elitist company, has figured that out.

Incidentally, as one other commenter has pointed out, Apple and Google via iOS and Android seem to pose more of a threat to Nintendo than do Microsoft and Sony. Nintendo had an unshakeable stranglehold on the handheld gaming market until the iPhone came along.