Obviously Nintendo's underpowered systems have under-preformed, multiple generations in row. The Wii was a massive outlier into the blue ocean. And the handheld market is getting out maneuvered by phones as well.
I certainly can't answer why Nintendo refuses to try and be competitive with Sony and MS in terms of system power. Is the cost that much?
The gimmicks and blue ocean gave them the Wii. Great. but, at the same its cost them, 3rd party support. A WEAK system is one thing, but games can still be ported to a weak system. Having to totally redesign controls, and port to a weaker system, with less total units is a no win for the publishers...
Microsoft Xbox One Reportedly Tops 20 Million Units Sold Worldwide, Still Trailing PS4 : Business Tech : Tech Times
For ref.. 40-55million ps4 thought to be sold worldwide.
20million Xbones.
13 million WiiU.