Ya too many people take the whole "fusion" term too literally and think it means one device that combines both elements. Thats why I like the term "unified" instead, two seperate yet very similar devices.

If the whole Fusion rumour came from an investor meeting, there is a strong tendence for terms like that to sound literal. So I would always takes these terms with a huge grain of salt.

Actually the Fusion rumors have come from non-Nintendo sources, Iwata has used the term unified alot lately when talking about the future.

Mario Kart 8 looks so much better because its the series first time in HD, how much better do u think the game would look on PS4 compared to Wii U? There would be some minor tweaks/improvements here and there but for the most part the game would look and play the same.

Yes, it would look better if developers put in the effort.  And we're not talking about PS4 power.  We're talking about something many years down the road with many times PS4 power.  Perhaps MK9 streaming to 4 gamepads at once with vastly more detailed graphics and effecst.  Not a few tweaks when you're talking a system with 20X the power.

My idea that Nintendo doesnt need extremely powerful hardware is because it doesnt really benefit them in any way. Most people will agree that Nintendo's next console will release in 2-3 years, so 2016-2017. PS4/Xone will be in thier primes and have the hardcore multiplat playing crowd on lock down while likely being $299. If Nintendo were to release a high powered console that is a sizeable leap over PS4 in that time there is no way they will be able to match it in price, probably $399. The millions upon millions of hardcore gamers on the competitors consoles arent going to upgrade to a new console that soon. Even if this console does happen to have the best versions of multiplats, it wont matter since the fanbases of those games will be happy on consoles they just bought in the last few years.

Most people don't agree on anything.  Personally, I don't think they will release the Wii U successor until 2018...17 is the very earliest.  The competition for Thwii is not PS4, it's PS5.  And with an all-new approach to a system Thwii could bring over gamers that enjoyed a different system.  PS1 did it.  PS2 did it. Wii did it.  XB360 did it.  PS4 is doing it.  Thwii will NEED to do it if Nintendo wants to be relevant.

In this scenario, Nintendo will once again have an expensive console with poor 3rd party sales which will once again lead to poor 3rd party support and will once again be a console for Nintendo fans with long droughts between big releases. Due to its high price, even big Nintendo fans will be reluctant to purchase it and there will be cries for a price cut which if they comply will lead to the console being sold at a loss.

No one is saying release another Wii U.  That was a horrible strategy.  And you're saying "once again".  That's impossible, since Wii U wasn't powerful.

Also ur idea that they can just sell it at a loss and make up for it with a subscription service is flawed as well. What would this service provide that will ensure enough people subscribe to the point it makes up for the consoles losses? Im all for Nintendo releasing a subscription service, maybe something like $50-60 per year for unlimited access to the Virtual Console but its too big of a risk for Nintendo to assume that it will be such a smash hit to make up for a loss leading console.

No, it's not.  It's a proven model that works.  PS4 adopted it swimingly.  Nintendo has the greatest backlog of past releases of any company by far.  A NN+ subscription could include online multiplayer matches and free past titles each month.  Classic titles from every system could be on offer (inlcuding Wii U and eventually older Thwii games).  Nintendo just needs to get the VC up to par with lots of N64 and GCN games, and get more online multiplayer content as Splatoon shows they can do.  The next 3DMario should have online multiplayer.  Probably the 2D one too.

I never said they would replace the console with a powerful handheld, I said they would release two seperate devices, a handheld and a home console with the same architecture, similar specs and that can run all the same software. The handheld will be between Vita & Wii U with the console being between Wii U & PS4 in terms of power. Nintendo has a hard time supporting two devices with seperate games especially now when dev time and costs have increased on both fronts but they can easily give excellent support to two devices if they play all the same games as one another. On top of excellent first party output we can also assume that the devices will recieve all the Japanese 3rd party support that Nintendo handhelds are known for.

I'm saying that between Wii U and PS4 is too weak for anyone to have interst.  Even Wii was more powerful than PS2, and Wii U is a clear step above PS360.  And even that strategy is clearly not working for Wii U thus far.

All Nintendo ever needs to do to be successful as a hardware manufacturer is to release affordable hardware sold at a profit with a steady release schedule of high quality software that cant be found on competitors devices. Lets say the console sells 15-20 million and the handheld sells 60-70 million, basically Wii U & 3DS numbers, its fine because they are making a profit and will still have multimillion selling software.

No, that isn't enough.  In case you didn't notice, Nintendo has been losing money.  Also, even Iwata said that if Wii did not greatly exceed GCN in sales, it would have spelled the end to Nintendo home hardware.  15-20 consoles is a fragile industry that could go under in an instant.  Nintendo and its shareholders will not and should not be satisfied with this.  They need to grow their market.  And if they don't have a mass-accepted product, children will not be growing up with Mario and loving it as an adult.