Nintendo has attempted to incorporate the idea of their gaming consoles going above and beyond just playing video games. With their most recent consoles( Wii, Wii U and 3DS), Nintendo has built them in a way that they've become more like "media boxes" than video game consoles. They have the ability to go on social networking sites like facebook via built-in apps, search the web using a web browser, and stream videos from Netflix and Youtube.
Nintendo wants their consoles to be the centerpieces of everyone's entertainment centers. The problem is, Nintendo's major competitors Sony and Microsoft have been doing the same thing for MUCH longer than Nintendo has and arguably do it way better. Back in 1999, Sega(who no longer make gaming consoles) released the Dreamcast. Dreamcast was the 1st gaming console that had the ability to connect to the internet. Playing games with people across the world, browsing the web at a time when not everyone had access to a desktop computer, and playing music CDs, Dreamcast was revolutionary. Sony took notice to the popularity of Sega's Dreamcast and set off to create the successor to the Playstation with the changing consumer tastes that the Dreamcast started. In 2000, Sony released the Playstation 2(PS2), a console that did everything the Dreamcast did, but better. The graphics for gaming were better, the online functionality was better and it had the added bonus of being the 1st console to also have a built-in DVD player. The PS2 swiftly put the revolutionary Dreamcast to sleep by the end of 2001(I was 11 at the time and was really bummed out about it. I really liked Dreamcast . . . .). Now Sony changed the battlefield, and Microsoft decided to join the fight with their 1st console, the Xbox in the same year. Xbox did pretty much the same thing that PS2 did, had better graphics and better media integration, and a built-in hardrive but made the mistake of not including a DVD player so the PS2 continued to dominate the market.
Now here's where Nintendo's blunder comes in. Nintendo was developing their latest entry during the life cycle of Dreamcast and during the development cycles of both PS2 and Xbox. Unlike Sony and Microsoft, Nintendo failed to pay notice to the impact the Dreamcast had on the market and the shift in tastes for consumers so when they released their Gamecube in the same year, it ended up doing less than both PS2 and Xbox. Nintendo had to release the console at a much lower price than the competition to make it appealing. Historically speaking, the Gamecube was a failure compared to older Nintendo systems.
Fast forward to 2005-2006 and its the dawn of Sony's PS3 and Microsoft's Xbox 360. Both of these systems aimed to drastically improve the functionality of their predecessors. This was the beginning of social media becoming popular and so there was focus on making gaming more social. Nintendo was also developing their newest console, the Wii. The Wii's gimmick was that it used motion controls so gaming became more of an exercise under the guise of playing games. Nintendo was adamant in not going in the same direction as Sony and Microsoft. At 1st, the Wii(which released before both PS3 and X360) did really well. It was the ultimate party/exercise machine . . . buuuuuuuut when the fad eventually died down, Nintendo found itself in a similar situation it had with the Gamecube.
Now its 2014. Nintendo now has it's newest console, Wii U on sale that does what Sony's new PS4 and Microsoft's new Xbox One does and at a lower price point. It seems as though they've learned their lesson when it comes to paying attention to the tastes and behaviors of consumers, but it seems as though its too little too late. Both Sony and Microsoft continue to dominate console sales despite being more expensive(I personally own a PS4 with no desire to buy a Wii U). As a consumer you'd have to be crazy to go for the inferior product. Consumers who want entertainment centerpieces as well as gaming consoles will always go with the console they feel holds a stronger presence, something they can brag about to their friends. "Yeah, I got a PS4" just sounds better than "Yeah, I got a Wii U" plain and simple.