You'll be sleeping a very long time, then, since Nintendo has no interest in producing cutting-edge (and thus very expensive) hardware.
Worth pointing out that what we consider to be "current gen" tech for consoles is actually 6 years old. In computing hardware terms, that's already pretty long in the tooth and it isn't that hard to imagine a new Nintendo console with hardware at least on par that is both price competitive and profitable.
This. It doesn't need to outstrip the competition, just match their hardware.
Sony and Microsoft aren't developing new consoles any time soon... it would mean hell for the game studios, and cost a shitton of money for Sony and MS.
Matching hardware with the 360 at the very least is a good idea for Nintendo, because they can get more 3rd party stuff going on - most developers these days use tools meant to develop games for modern PCs and consoles. By upgrading their hardware, Nintendo makes it easier for people other than Nintendo and Retro to make non-sucking games for their console.
this assumes that third parties will want to take a chance on the system. i suspect there will be a lot of cheap ports as companies test the waters. why spend the money on a tiny install base, and a fan base that hardly supports hardcore 3rd party games. (sure those fans will make a lot of internet noise, but it doesnt mean the games will sell).