The thing about sales is that it's all spin. Even when the PS3 was in "dire straits" it had still sold faster than almost every console in history up to that point, including the 360 (as in year 1 vs. year 1 sales, year 2 vs. year 2, etc.). It's also perception. Someone informed of current gaming events probably wouldn't know that Gran Turismo is more successful than Forza or that Final Fantasy XIII was much more popular than Mass Effect 2. So outside of spin and perception, I don't think video game sales support the crazy extremes they're often rationalizing. As Evastio pointed out, Nintendo can withstand two more generations of Wii U debacles before it seriously has to evolve or die. Of course a console that sells no units with no brand power is going to fail, but in most cases, the numbers really won't mean as much as a the gamer commenting on a news article is making it out to be. We're a bunch of sensationalist trolls, not informed investors. And if history has taught us anything, I'm not really convinced that sales translate into the health of a game library.

I agree with Iwata that all of Nintendo's good will would dissipate if they became a third party publisher. Nintendo's software feeds off the creativity of its hardware and vice versa. A lot of its games throughout history wouldn't have been possible on other platforms. I'm absolutely absorbed in Etrian Odyssey IV right now and that game just wouldn't be the same if it wasn't on a handheld with a stylus and stereoscopic 3D. The day I play Mario with a dualshock or sync my Zelda save on the Steam cloud is the day gaming becomes a hell of a lot less magical.