Its widely known that one of Nintendos most archaic practices is remote controlling the whole of Nintendo from Japan. That's why Nintendo had their big Wii U Nintendo Direct the day after the Iphone5 had their big press conference because Nintendo Japan doesn't know jackshit about the american market and makes terrible marketing decisions for the foreign branches. If Nintendo of America was running itself, they would have held off for a week or two so the Iphone 5 news would have cooled down. Instead the Wii U information got stuck on page 40 of the mainstream news buried under 2 tonnes of Iphone 5 crap.

From my (limited) understanding ...

Most of the development and strategic decisions are made by Nintendo of Japan, while Nintendo of America with marketing and third party relations within North America.

Western companies kind of suck at making handheld games. They're good at making cell-phone grade games, but those are fairly depressing in quality when compared to real handheld games.

Also, NoA is not a production branch, NCL is. They do manage western studios, such as Retro.

My point is that Nintendo needs new studio's anyway, and why not make them in the West? Where game development is bustling? Why not start up another Retro like studio? Or expand/Split Retro? Nintendo needs to put out more quality games, and Retro has shown with Prime and to a lessar extent DKCR that Western Devs can make Nintendo franchsies even better than Nintendo themselves.