I've always felt that Nintendo licensing their hardware to other companies was the way for them to go, if they wanted a piece of that multimedia pie in any way. I still believe there's room for an all gaming console out there, but it has to be something really special in that regard to compensate for the lack of multimedia features. By multimedia I pretty much just mean the playing of things like CDs/DVDs/SACDs or whatever, things like Tivo-like recording of TV shows, MP3 ripping, or even copying using optical media. A harddrive and Internet connectivity though, I consider intrinsic to the future of videogames and hope Nintendo feels the same way in a few years if not today.
Their attempt, or Matsushita's attempt, at using Nintendo hardware in a multimedia product this generation seems just miserable to me. That Q thing is an abomination, absolutely the opposite of what it's intended audience would desire from that kind of product. They should have simply made a normal looking DVD player, with the Gamecube hardware integrated, instead of putting out an unattractive block expecting people to gladly add its tacky visage to their entertainment centers. Had they done it right, there might've even been some parody between the two Gamecube iterations in terms of sales. Now it's important to note that If in the next-generation, Nintendo or the company's they deal with do start doing things right as far as 'diversifying' the product, they must be careful not to fracture their market. Too many takes on the same product could be detrimental, in ways I don't feel like getting into because it's a bloated subject. I would add though it would be interesting to see a company like Apple add value to their product-lines by offering some desktop model with built-in Gamecube 2 technology, as opposed to yet another set-top box contending for your shelf space but whatever.
As for the issue of price, first they are not substantially less expensive than the competition as it stands today. What's worse is, with the negative image Nintendo has been fostering exacerbating things, the lower price point actually hurts them in some regards. People do associate price with outright value, so when the Xbox or the PS2 offer their product at just 25 to 50 dollars more, and they discover those machines have more features whatever they may be on top of that, Gamecube ends up devalued in their eyes. Of course I'm referring to the general masses here, the mainstream, that lucrative glut of any potential consumer-base. I would pay 250+ for a new Nintendo machine, if I thought it was truly special. If it were a monster in terms of game-only-related features, details of which deserve their own topic I think, then they might be better off next-generation starting off with just a 20 or 50 dollar price difference relative to the competition as opposed to a full 100 dollar price difference. Convincing people through marketing alone that they're getting a product that's just as good as the 300 to 400 dollar machines for 100 less would be a bit too challenging I believe. Unless of course they have something truly special, such as mind-blowingly nice looking games, that simply advertise themselves. Yes fantastic gameplay is necessary too of course, but people tend to look to more superficial elements they can take in at a glance as a measure of value unfortunately.