The way I see it Nintendo has a chance to completely dominate the market if they play their cards right. They are simply been given the opportunity to be the only next-gen console on the market, portentialy, for about 2 years.
In regards to hardware, I think all Nintendo needs to do is to launch the consoles with a port for a future GPU upgrade (they have a couple of options on how to implement it, if they work close to AMD this should be considerable easy).
If when the xbox720 and the PS4 arrive (around 2014), if they can somehow manage to overwhelm the graphics of the Wii U, they can simply make use of this feature and release a GPU upgrade for the Wii, and if they develop the games with this possibility in mind they could even improve games that were already released for the console.
In 2014 the cost of a R700 will be ridiculously low (it already is very low, and does a fine job), and the Wii U CPU won't hold any upgrade now. So there you go for ~60$ the Wii U could counter the opposition theoretically best advantage.
As long as Nintendo can maintain next generation 3rd party games been released on the Wii U Nintendo has everything to be a hit.
We can clearly see that in the current generation, investments in the production of games, holds way more weight in the final product than the hardware it will be played at. For the next generation, hardware raw power will become even less important (although other features such as how easy/difficult it is to develop to that platform will become even more important, so will be the quality of the services that will support online gameplay, game purchase, distribution politics, etc).
ps: if they can have the current Wii game running at 1080p with a couple of effects, it would be an awesome plus.
ps2: if they can make it easy to port games from other current gen platforms to the Wii U it would simply excel, it would be able to hand-pick the best 3rd party titles around for the last couple of years and make them available to Wii U at reasonably price. The Wii U control also makes it possible to see RTS, MMO games on the console, or even improved controls for FPS without the need of the auto-aim bull****, it depends on how effective they are at taking advantage of the control (by taking the risk of releasing such a expensive and odd control, I must assume they have some good ideas).
Ps3: Ironically the Wii is the only system I don't own in the current gen.
Edited by Firanford - 10/21/11 at 11:19pm