I can see them leaving the console business and sticking to handhelds. They rode the wave of the motion controller gimmick and unless they do the next big thing which would have to be VR, they just cant take on MS & Sony, especially with the lack of interest from 3rd parties.
If they do leave consoles, I'd like to see them develop games for X1 and PS4. Make money on their handheld stuff and make money on console games without the burden of a low install rate, plus they get to work with more powerful online infrastructures. Get people interested in their franchises who wouldn't usually buy a Nintendo system and then make a return to consoles when they get their shit together.
I doubt it.
Far more likely is that their consolidation of console and handheld devlopment turns into a hybrid console.
Dedicated handhelds are too much of a risk. The 3DS has clearly lost some of the DS' market share to mobile.
Despite the amount of money Nintendo made during the DS and Wii I don't think that enough to justify his position, he really needs to more proactive and realistic of the changing market scene, two things under his control which I feel have weaken Nintendo, is taking control of the American market he just doesn't understand the west and the lack of new ip's this has been their greatest weakness for a while.
He has admitted today that he has made a number of mistakes on the things you've mentioned.
Could get ugly if the Wii U doesn't pick up this year, 3DS has peaked. I just hope they don't panic and put they're original ip's on phones/tablets from investor which have no idea about the market.
Funnily enough that would become far more likely if Iwata goes.