I'm hoping the situation will improve, but it won't be dramatically, it'll be gradually. I don't think it's dead, it probably won't die (if it does) at least for a couple of years. I admit as an owner of one there aren't a ton of games that interest me a lot, it also doesn't help that I'm a cheapskate and don't like getting too many games in too short a period of time (it almost killed me when I got the Red Faction games and three D&D games in the same week; also doesn't help I've been starved for a decently powerful computer for years now and just got one around the same time as my Wii U).
Games wise, it's not doing too badly, not getting much better, though. Getting big third party games for now, but CoD games don't interest me unless they are bargain bin cheap, and AC IV might be the only interesting AC game since the first one (for me, well, three wasn't too uninteresting). Hopefully, my Wii U is going to see more use when: A: I beat The Witcher 2 and get out of my Medieval binge 9both the Total War game and the setting); and B: When Smash Bros., Pier Solar, and Mario Kart come (and please, God, let X come out this year).
Whether dead, dying, or Renaissance, I'd say staying afloat and could either drown or get rescued.
jamyskis: I bought a Wii U upon release. Because it was my first 'official' Nintendo console (I did have a Gameboy and Gameboy Advance back in the day, but nothing else) I had the benefit of the Wii back catalogue, which kept me going until a decent number of Wii U games came out.
And Super Mario 3D World, Wind Waker HD and Wonderful 101 make the Wii U worthwhile alone.
Wonderful 101 really is a wonderful game. Really wanted to get 3D World, but I didn't know whether or not I would get a Wii U so I decided to invest in more 3DS stuff, even though I now have a Wii U and no 3DS...
timppu: As far as i can tell, many of the (younger) people for which Nintendo machines (Wiis etc.) were bought earlier, have largely migrated to e.g. tablets and smartphones now. They play their childish and simplistic games now on their tablet/smartphone, not the Nintendo devices.
At least that is what I see around me. Quite many families I know specifically bought Wiis and DS'es to their kids years agp, but nowadays those same kids seem to be playing pretty much only on iOS/Android. And it seems more lucrative to parents as well, as the new devices are full of "free" or dirt-cheap games, and they are multipurpose devices (e.g. kids can play on their cheapo Android phone as well)..
Yeah, I noticed that too. It's kinda sad to see so many kids grow up and play iOS games and think they are "gamers" (the term is a little annoying anyway, but still).
StingingVelvet: I feel like there's always a solid 30 million or so Nintendo fanboys who will buy any Nintendo machine eventually, because they must have all the Nintendo games. Half of that 30 million works in games journalism, by the way.
Nintendo will be fine.
Unfortunately, Nintendo keeps making 3DS the much more appealing option (bad for Wii U, good for 3DS).