What should Nintendo do?

At this point in the product cycle (34 months after release) the 3DS is 10 million units, or 20% down on the DS.

The PS Vita is 11 million down on the PSP, and falling. Sony is on track to sell a third of what their previous generation handheld did.

You cannot hold up the 3DS sales in isolation. The handheld gaming market has suffered a massive contraction. How many 3DS sales have gone to committed handheld gamers that simply switched from the PSP? What is the profit per unit of the 3DS, given that Nintendo is driving sales with price cuts?