To me, it all comes down to this:

Pressure will likely mount on the architect of the Wii success in 2006 to step aside or shift course to focus on making money from “Super Mario” and other software titles. Nintendo so far has refused to allow its games to be played on machines built by competitors or on tablets or other mobile devices that are used by gamers.

The pressure is building. Nintendo needs to either reinvent themselves entirely, shrink to focus on their handheld success, and/or start licensing franchise brands like Zelda and Mario to Microsoft or Sony.

Nintendo will be around for a while, no doubt. They project a loss of about $335 million this fiscal year and they have about $14 billion in the bank. That’s excellent news for them and gives them plenty of planning time. I worry that their hand-held business might deteriorate once the phone game controller market matures over the next few years. The longer they wait, the fewer the options.