Rock Hill, SC
Quoted from jar155:It wouldn't make business sense. Nintendo is the only company that makes good profit on hardware sales. By keeping all their games exclusive, they drive their own hardware sales. They wouldn't make enough in software sales on other consoles to justify cannibalizing their own hardware sales. Look what happened to Sega when they went 3rd party. It hasn't gone super well for them.
From Mashable in July 2016, "The share price increase has sent Nintendo's market capitalization — the value of the company based on its stock price — to more than $40 billion. That's more than one of its rivals in the video game industry, Sony, which is around $38 billion."
Nintendo isn't missing any boats. They're doing just fine. They sell less hardware, but they're more profitable in the end. I'm sure they'd like to sell more, like any business would, but not at the expense of overall profits.
If you look up the stats, they don't really sell 'less hardware' either. In the past 15 years they've sold more systems than Microsoft or Sony... (counting handhelds). There's this big illusion out there that Nintendo doesn't make money on hardware but like you said, they're not missing anything. They know exactly what they're doing.
Another interesting point about hardware is, Nintendo profits on all their hardware, Sony and Microsoft sell at a loss for years when they first launch their systems (so that folks will buy the games, which have a high profit markup of course). So when Nintendo sells a console, it represents profit, when Sony sells a console it represents potential profit and a loss on the actual hardware sale.
I'd like to point out too that their timing on the "Switch" is perhaps the best timed release of all time. They're about to re-write what making money in the video game industry means.... and then after they make all that money, they're going to make it all over again in a few months when they release perhaps the greatest Mario Brothers game ever... just in time for Christmas.
Meanwhile Sony and Microsoft will continue to make money with their systems that are two or three years old... Nintendo didn't do phenomenal with the Wii "u" but they've set themselves up and perfectly timed this new system to burn up the market.
