I believe Sega will be showing some more love to Nintendo after the cash cow they recieved in M&S... That game alone will put sega in the black...

buying 3rd party exclusives usually comes at a cost, right? usually its lowering royalty amounts by like 1/2 or whatever the deal comes out to be, as is my understanding.

So its like sacrificing money in the short run for marketshare in the long run. Am I correct?

I don't know about the lowering royalties but it makes sense. They're not holding them hostage, so they want them to feel comfortable with the deal so lowering royalties would be one way of coaxing them to do so. But I would say that money up front will make most of those developers do almost anything.

The other thing the Wii needs is an excellent driving game. I'm all about MKWii, but a good racing game without banana peels has got to come soon as well.

The answer to this is:

Depends.

Do you want sequels of established franchises or do you want new IPs.

If you want sequels = pour money in to 3rd party exclusives/purchases

New IPs = I would prefer to see Nintendo open a new studio in house. Something that is still 'Nintendo' in style but different in substance. Focus on the genres the Wii is weak in (RPGs/Shooters, though I don't care much for either of those 2)

I think Nintendo is already using its financial resources to get more third party support. I just think that they're investing it smartly rather than just throwing money at third parties or gobbling up all the dev studios they can like an EA that only develops for one platform. Some select studio purchases may be in order, but eating up everything in sight will bloat Nintendo and threaten to crush their own innovation.

We already know that Nintendo is giving vital support to the development of Fatal Frame 4, and there are rumours that Factor 5's new Wii game may use Nintendo's own IP.

I think that Nintendo is investing in third party development. They are making sure that Nintendo sees returns on this investment while they alleviate the risk third parties face by providing financial backing and developer support. The result is that Nintendo gets a broader library for the Wii and some money back on their investment, while third parties get to make a game for a platform with huge potential without worrying about getting steamrolled because they're competing with the biggest first party developer in the world.

Nintendo's been doing that actually. They give money out to small developers and then buy the rights/publish their games when successful, i.e. gamefreak and pokemon. Though I think Nintendo bought them out or made them second party or something once they made pokemon

I would place money on Factor 5's next game being a Kid Icarus game, especially considering comments the company made recently.

They should buy Sega for Sonic and make a great sonic game again.

Why? Sega already makes games for Nintendo

The problem with buying out companies is

1) You share the companies financial troubles, (i.e. Sega)

2) If all the programmers leave, then you're stuck with just a name, (i.e. Rare and the guys who left to make TimeSplitters)