As a Nintendo fan myself, I have no problem with Nintendo going third party. I've never owned a rival console but the prospect of Nintendo games on hardware capable of superior graphics and online infrastructure is really appealing and exciting to me. On top of that, I would finally get the chance to try out some third party games that aren't available on Nintendo consoles without the huge cost of buying a new console to do so. It seems like consumers would benefit from Nintendo as a third party publisher.

In terms of Nintendo as a company, they would definitely benefit from access to a far larger userbase. If Knack can outsell Mario 3D World, it shows that Nintendo aren't reaching a wide enough audience to maximise revenue at the moment. In the long term, the value of the IP will diminish as well. The concept of Knack being more recognisable than Mario may seem laughable now, but if sales remain poor over the long term (5 year console cycle) it could eventually be reality.

The business would also be able to rid itself of the costs and risk associated with console production. The string of operating losses experienced by Nintendo are largely due to the performance of the Wii U, and removing this cost would definitely be beneficial and viewed favourably upon by shareholders. Being a console maker makes little sense when third parties aren't developing and selling units on your system as the platform royalty income can't compensate the cost of production.

Nintendo would also benefit from business relationships with Sony and/or Microsoft, if Sony are willing to pay for exclusive Ass Creed DLC imagine what they'd pay for 3D World exclusitivity. Sony/Mircsoft/Whoever may be willing to forego platform royalty to bring Nintendo software to their platform.

The main argument against going third party I constantly hear is "look at what happened to Sega." This is completely incomparable to the situation Nintendo finds itself in. When Sega went third party they were in financial ruin and had to completely restructure their entire workforce and lay off a lot of employees. The quality of their releases declined as a result of this. If Nintendo were to go third party their development teams wouldn't have to undergo such a massive turnover. They are in a financial position where EAD and other first party studios can carry on work as usual without letting anyone go.

The other thing I have heard before is that Nintendo EAD is able to create such masterpieces because they have such a large input into the design of the console and are involved in its creation. This is just patently false. The corporate structure of Nintendo has created quite a gap between hardware r&d and software development. We've had several senior developers and producers (most recently Aonuma) say they were unaware about much of the Wii U specs until only a few months before release.

So why are we so scared of Nintendo going third party?

Because the pressure of having to carry a hardware platform is in part what pushes Nintendo dev teams to try so hard.

Look at how crap Sega is nowadays.

Nintendo will accept a buy-out/merger with Disney, Microsoft, Apple, or Google before they ever go third party IMO.

@bolded: I usually agree with everything you post but this is just nonsense.

The Sega thing I've covered and they are actually very healthy nowadays. Their quality hasn't fully recovered but as I've said, that was more a financial issue (casued by stubbornly refusing to go third party) than anything else.

Your last point is probably true. But stubbornly refusing to reach out to a wider audience is not beneficial to consumers or themselves as a business.

An alliance with Google or Microsoft would give them a much larger audience on their own terms. 

If done correctly a Google-Nintendo phone could outsell all the consoles combined from this coming gen for example. 

Well then I'd have to buy Sony consoles, which tend to cost more.

For instance, if I had instead bought a Vita when I bought my 3DS, I would have spent $80 more on hardware -- that's two full retail games. I haven't bought a Wii U yet, but of course at the moment the PS4 costs $100 more than the Wii U.

Hell, I bet I spent less than $600 on my launch Wii and all of the Wii games I own together.

This would be absolutely amazing. I wonder if there would be a big market for it?

Because Nintendo make consoles with more interesting interfaces and lower price points than their competitors.

Sega isn't in that bad of shape financially. Have you seen all the buyouts they have been doing? They were the first ones to the scene when Atlus and THQ sold their stuff. Yet we still are getting stuff like Sonic Lost World. Although I will admit that may be because Sega decided to halt development at half finished because of Wii U software sales.

Lolz

Sale your soul rather then become the top 3rd party dame developer over night, makes total sense.  All the resources they could flood into game dev if they dropped hardware, they may put ea out of busniess.  

they make reliable consoles.

Look at the gamecube as an example. May look like a lunchbox but drop that mfker from 20feet and it still works,