Gunpei Yokoi (1941-1997), one of Nintendo's most significant employees.
The extremely influential (and of course relatively undiscussed) Gunpei Yokoi practically developed Nintendo's everlasting manner of competing in the gaming industry. He articulated it as "lateral thinking with withered technology"; such was a fancy and succinct way of describing a philosophical approach in which outdated technology is utilized for maximal effect, particularly in terms of novelty and product depth.
Nintendo, in correspondence with this philosophy, has typically continued to sacrifice technological advantages in the console market for cheaper console production out of the belief that their games are attractive enough to not necessitate competitive hardware. The Wii is, fiscally speaking, the realization of Yokoi's ideal; it had enough console-exclusive games of a respectable status and the proper threshold of gameplay innovation to appeal to a very broad audience demographic in spite of "withered technology". However, it came at the cost of an ambivalent critical reception, particularly amongst serious gamers, who were not always swayed by what could often amount to a mere change of control schemes in their games.
This has provoked an interesting change of strategy for Nintendo as it moves forward into the the eighth generation of consoles. It has partially continued to embrace the aforementioned philosophy while focusing on producing and acquiring sequels for well-established franchises (i.e. New Super Mario Bros U and other Mario platformers, the Sonic-Nintendo partnership of late, "updated" editions of games already released for some seventh generation consoles). On the surface, this appears to make the Wii U a stronger combination of innovation and gameplay depth for all gamers.
However, sales deficits and general malaise regarding the Wii U indicate otherwise. The casual gamer has been alienated by a requirement to buy an expensive and seemingly unnecessary / boring system, and the more obsessive gamer is disgusted by frequent and low-grade rehashings of aged games as well as the Wii U's unexceptional hardware. Given the impending release of the PlayStation 4, which is expected to be the most technologically advanced eighth-generation console at a comparative price-tag excess of a mere fifty dollars (as it currently stands), the Wii U is not poised to be profitable, even with Super Smash Bros 4 (another sequel, with its quality TBD) litigating for it.
Nintendo badly needs innovative console-exclusive games to enhance the Wii U's reputation; however, it seems to be oddly content with its current status as a regurgitator of aged gameplay. Its performance at E3 2013 showcased a Mario platformer that is a direct sequel to a recent 3DS game of the exact same nature, a new DKC (the current studio of which is admittedly producing the game from developmental scraps of their earlier DKC Wii title), a remastery of an earlier Zelda title, a new Mario Kart with hardly any outstanding features, and a blatant expansion pack for an earlier Mario platformer.
If the current status of the Wii U is any indication of the future, it will be difficult to sell gamers of all kinds on these titles. Although franchise refinement and the positive word of mouth that can follow it is a possible means of revenue for Nintendo within their current strategy, granting uninnovative sequels to old franchises is a poor long term strategy because Sony can, frankly, both do the same with equal or greater effectiveness and interest third party developers with its advanced hardware. Nintendo must change by employing new IP developments and creative risks to succeed proper this generation, as without innovativeness, Nintendo has no competitive advantage and several comparative disadvantages with the PS4.