Nintendo has to pander towards 3rd Party creators to have a larger library of games and larger appeal to customers. The XBox does make money for Microsoft, about half way into the 360's lifetime Microsoft made a huge deal about the XBox brand finaly paying off. The reason for that was because Microsoft sunk a huge amount of capital into the original XBox, they were entering a market they had barely any understanding of, and no name for themselves. At the time they started work on it, the market was dominated by Nintendo, Sega and Sony, there were other smaller names, but those three are the big three. Microsoft was not only sinking millions into the machine itself, but marketing, market research, and games. Microsoft went and bought entire gaming studios, some of which with pre-established names, to offer a decent and interesting library of launch titles. On top of that Microsoft then went and invested even more money to give the box something special that nobody else was offering at the time a proper online functionality. Sega had that before right out of the box, but they went under before the XBox debuted. Nintendo tried and failed, and Sony kinda had something for a few select games. The XBox established itself as essentially a specialized gaming PC for those who are serious about their gaming. And yes, the power of a console is a huge part of why people buy it. Remember the one true console war? It was waged between Nintendo and Sega, Sega pushed out the 16 bit Megadrive during the NES's lifetime and advertised how it was much more powerful than the 8 bit NES. That advertising granted them a pretty hefty market share, which got even bigger once 3rd Party developers started to jump ship and release titles for the Megadrive instead of the NES. Nintendo finally realized that they couldn't sit back anymore and released the 16 bit SNES to compete with the Megadrive, and it was much more powerful than the Megadrive. Yet still Sega spouted that the Megadrive was more powerful, because it had "blast processing" which made their games run so much faster than SNES games, in truth that "blast processing" was just a slightly faster processing speed, which the SNES made up for with its hardware anyway. That whole thing kicked off the bit war and because Nintendo is too arrogant they've been losing market share ever since. They were to arrogant to listen to their 3rd Party developers in the 80s, causing them to join up with Sega, too arrogant to react fast enough to the more powerful Megadrive, lost more market share. Too arrogant to jump on the trend of optical media, thus having cartridges for the N64 despite everyone else long using CDs, which meant that games were more expensive to make for publishers and the cartridges didn't have enough memory for the games, or have good audio, means more developers developing for the Playstation. GameCube they finally use discs, but instead of CDs or DVDs they use their own proprietary format, which again made it more difficult and expensive for 3rd party developers. Then the Wii comes out and it's just a GameCube with motion controls. Now the machine isn't as powerful as the competition, has a proprietary medium for games, and incompatible controls. Wii U, made it sound and look like just a new accessory for the previous Wii and while more powerful than the competition, it was released at the time that the competing consoles were already being fazed out to be replaced with much more powerful flashier ones, which were again more powerful than the WiiU. Sony and Microsoft listened to developers, the console architecture of both XBone and PS4 are much closer to PCs, making porting games much easier (especially important for PS4, since botht he PS2 and PS3 were hard to develop for making many games look less good than on competing hardware), both use a standard optical medium that is cheap to make to supply their games and have large internal harddrives, while Nintendo tries to convince people that 30GB is more than enough for pro gamers. So yes, Nintendo has to step up their game, the next system has to be powerful, it has to be accessible, it has to be marketed properly and it needs games - not a few games, but many games. They should ditch the Wii remote and the gamepad as a defining accessory and just include a controller as the main input medium. Make the Gamepad an optional accessory, with a larger battery, and advertise it as something different from the Wii and Wii U. Launch it with their maskots and most famous titles, it looks like they are looking at the report of how Zelda is delayed yet again. And advertise the 3DS compatibility. Nintendo still has a name in this industry, but they're slowly losing it, that's the entire reason Miitomo even exists, because they're trying to reach out and gain more customers. Nintendo not being at E3 this year is no big deal, they've been showing up less and less and started their own more successful event. On top of that E3 is press only these days and turning more and more into a sham barely anyone cares about anymore.