as hardware manufacturer, and they are ok with that!
In the past software and hardware both were profitable, unfortunately due to increasing competition not only from microsoft and sony but pcs and handheld devices in general the profits on hardware are plummeting.
Secondly Nintendo lost focus on whats it all about: games and not going whiblywhobly with a controller
it's simple they are gonna make their biggest draw back also their greatest strength
open up the audience from ten million tho billions.
play smash bros on your tablet, you got it!
Play your pokemon MMO on PC done deal!