It's not the amount of money, it's the level of risk. They can't risk getting into an arms race with the other two. If Sony's gaming division collapses, they have 20 other products to keep them afloat. If MS's gaming division collapses, they have 100 other products to keep them afloat. If Nintendo's gaming division collapses, Nintendo collapses.

Gaming CURRENTLY is all of Nintendo, yes, but they're going into QoL which will likely expand into life insurance quickly, exactly what Sony's biggest moneymaker is. But that's the future. As for right now, the investors mostly don't even know what Nintendo games are and Nintendo has been trading shares with other companies like DeNA and their amiibo manufacturer to seemingly try to limit how much say shareholders could even have in the near future. 

I totally get that. But quite frankly, I see no difference between trying to appeal to a whole different, probably non-existant fanbase, with consoles that are so drastically different from the competition, they might as well not be competitors... to trying your chances with a traditional console, similar to PS4 and One - thus gaining at least third-party support.

They're trying to hit that sweet spot they achieved with the Wii. Sounds just as risky to me - probably even more.

Their main focus right now is Image Sensors, PlayStation, Movies/TV, and Music. Cameras/Camcorders and headphones/media players are stable, with lower investment, and TV and Phones are on the back burnen (No new investment). 

The priority right now at Sony is growing the PlayStation 4 install base, getting a steady income through PS Vue, PS+, and PS Now. Reinvesting more money into gaming software, network services, hardware, and peripherals.

On Topic: Nintendo does not hold enough stake in the market to convince 3rd parties to join their platform. They have even less pull when it comes to media providers, and alternitive software. Money alone can not help this situation. They may have a few billion cash, but that is small compared to the amount of cash made through PS and Xbox, which themselves are a grain of salt compared to ios and android. 

The chances of Nintendo ever releasing a home console that sells 10M units agian are close to non, and their handheld business, is in the same position. The next devices released by Nintendo will be their last unless they are satisfied with only reaching the less than 10M people that are willing to buy Nintendo handhelds and consoles for Nintendo games only.

Whoever said they couldn't afford it? I'd seriously like to know.

I don't think that there's even a metric where they could be considered "bigger".

Nintendo can spend, but that's not how they do business.

Honestly, Nintendo has backed themselves into a corner where they have no choice but to spend money. If they'd done so sooner, things would have been better now. However, the massive success of the Wii coupled with low production costs probably lulled them into a false sense of security, where they thought they could go into this generation at the same pace.

Unfortunately, betting on the success of hardware gimmicks/innovations is a pretty steep gamble. If you lose--and there is a good chance you will--then you'd better be in a position where you can minimize the damage. Nintendo, though, was performing without much of a net and the failure of the Wii U caught them by surprise.

The good news is they seem to be in the process of building up for the future. Now is the time, if they want to be ready for next gen. We won't see it, though, not for a few years, so it's hard to say for sure, but I get the impression that they now understand that they can no longer simply count on the strength of their brand to draw profit.

You're confusing "not being in the arms race" with "not trying to appeal to gamers". Many internet-forum gamers like to make claims like the suggestion that Wii only appealed to "teh cazualz", but it was never true. Nintendo appealed to the same 20 million that bought the Gamecube, plus more people, many of which were lapsed gamers.

What Nintendo achieves by being different is a situation in which serious gamers can consider getting a Nintendo console alongside either a Sony or MS console, in order to get both styles (that is, for the serious gamer, who is likely to buy multiple consoles, they could get MS and Sony consoles, but that would mostly be redundant, or they could get a Nintendo console and one of the other two, and get a better variety). They provide unique appeal that can't be obtained anywhere else, including previous consoles. And so, for those who want to buy only one per generation, and already have the previous generation MS or Sony system, Nintendo's systems can be appealing just for that.

Is there a risk, still? Yes. But it's not a risk of getting stuck in an arms race they can't win. It's a risk of failing to provide a product that appeals to enough people. And generally, Nintendo hasn't had that problem. The early part of the generation, when they were launching the 3DS through to about a year after the release of the Wii U, they struggled a bit... but it was a short-term issue. In an arms race, it would be a long-term issue.

Sony is getting deals now because they own over 50% of the market and are outselling their nearest competitor 2:1 on a weekly basis.  They have all the leverage because if your game sells more on PS4 it will sell a LOT more.

They did it before, Gamecube and N64 say hello. Both flopped because they couldn't manage to stand out enough compared to Playstation, and later, Microsoft. Even then they got already screwed by the third party publishers and it's very likely it will happen again on the next console, no matter how awesome it will be, pushing consumers again to buy an Playstation or Xbox.

In other words, Nintendo needs something other than pure specs to stand out from the rest of the crowd. It worked well with the Wiimotes, sadly not with the Gamepad.

They can financially afford such a console, but the question is more: Will it do Nintendo any good? If it flops (which, like I said, the paintings are on the wall already), surely not. So it's better for them to take a third option and do something special, as this at least can pay out