Honestly, I think it's probably a wash. Historically, it makes sense for consoles to launch with lighter libraries: market isn't there, it takes time to develop, developers are struggling with new hardware so there's a longer turnaround time, whatever, but that usually means that there's a lighter library of games and not as many good games as there would be in the later years of the console's lifespan....not that there are virtually no games at all.
I remember people saying the same thing about the PS3 and it actually had a shitload more games in the first 12 months....just not a shitload of games that were must have. But, nevertheless, a shitload more than a 7 month period with 7 games listed to be released. And as it is, the PS3 turned out to be awesome and (strangely) most people I know who owns one will probably eventually buy a PS4, just because there is so much value there. I rarely play games on it, my friends rarely do, but those who own it all use it a hell of a lot as a central media unit. Considering the PS4 is using (I guess?) more standardized and off the shelve hardware, I imagine Sony could manage to capitalize upon that in order to make it actually profitable to sell systems themselves through a combination of the lack of expensive R&D, cheaper component parts, and licensing fees for those who do buy a lot of games. Microsoft very much stands to do the same for a simple reason: Both have satisfied customer bases. Nintendo, for the most part, doesn't really have that...and hasn't for the last few generations.
Nintendo is great at making games, but since the n64 they really haven't done a good job of creating the image of their consoles as the one to own. I don't know anyone who owned a gamecube without owning another system. I can't really remember anyone who really liked videogames not eventually buying a playstation in addition to the n64, and I can't think of anyone who was a gamer who just owned a Wii (which is a huge missed opportunity by Nintendo since EVERYONE has pretty much owned a Wii at some point). And the thing is that there just weren't any games for any of those systems apart from the sporadic Nintendo releases and the very very occasional 3rd party must have (exclusive or multi-platform).
At this point, Nintendo has basically been branded as a supplementary console, and that's slightly dangerous for them, because publishers just probably aren't going to focus on their hardware because of it...why bother when you hit 90% exposure to the market with Sony, Microsoft, and the PC? It'll be a hard rut to get out of. And fair enough, they're doing well as a company; it's not something that's going to kill them tomorrow - they have more cash in the bank than most and are positioned very well. If Sega was sitting as comfortably as Nintendo is when they released the Dreamcast they'd still be making hardware. The Doom and Gloom (capitalization is the shit) articles are just hit bait for that reason: Nintendo isn't going anywhere soon....but they also have a huge problem in that there's now an entire generation of kids who never had a Nintendo console which wasn't a wasteland of mediocre games (or few games), Publishers who don't think their ecosystem is worth investing in, and a mobile gaming market which is slowly and definitely getting chipped away at by devices that everyone already owns anyways.
Nintendo isn't leaving the business anytime soon, which is good for two reasons: 1.) We need them, and 2.) It's Nintendo's only business. But, they really have to do SOMETHING* because they very well could find themselves in a position they can't come back from. Not today, maybe not this decade, but they're a slow moving ship and they have to alter course ASAP or else it's not going to be avoidable...eventually**.
*That something may be stopping the piracy protection on the 3ds. Flashcarts fucking sold the DS
**I should clarify that by "position they can't come back from", I don't mean the death of Nintendo, just the exit from the hardware market due to lack of profitability.
