Why haven't they done this?  Seems so obvious..

Nintendo and Microsoft Fusion. :)

but the fans for both side would surely won't like it.

agreed, imo the NX just needs to be a powerful handheld (essentially X1 specs for easy porting) that's able to hook up with a TV and controllers for the full home console experience and preferably launch with the next mainline Pokémon

I think that would guarantee strong sales and should sway the 3rd parties to bring all the big gen8 multiplats to it + many big budget jpn centric games will probably be PS4/NX that way

Oh... here we go again assuming the NX is the next-generation Nintendo home console.

I can tell you this much. No Nintendo home console released next year will become a bigger sucess than the Wii U. 

Nintendo needs not only a system that can outclass the PS4 but one that can compete with the PS5 as well. I don't see it happening in 2016. Unless they have something big up their sleeve they are doomed.

there is no way to release an affordable console in 2016 that can take on a $400-500 device which releases in 3-4 years

sounds expensive

I've said this for years.

In conjunction, they should make the console an x86-GCN with at least 8GB of memory, and aim for an initial price of $299.

Eliminate 3rd party licensing fees or reduce them to half of what it costs to release on PS/Xbox.

Go on a hiring binge and get Smash, Zelda, Kart, Splatoon, Metroid, Mario, and Kong all rolling. But a flagship Pokemon game could be quite a coup imho. Have crossplay elements with the mobile versions, etc. Do that so the console gets a good launch, but ABOVE ALL : do whatever it takes to get EA/Activision/etc on board and making all major multiplats day 1 on their console.

All of this will never happen, I think Nintendo has just gotten too comfortable in their ways. The Wii was an anomaly that might have taught them all the wrong lessons. Anything can happen I suppose, but I expect the hardware to be a mix of better/worse than current gen stuff, oddball architechture, and no concerted push to court third parties back to their side. If the price is right ($299 for a very powerful system, $249 for something merely on-par with X1, or $199 for something halfway between WiiU and X1), then I could see it outselling the U, but that's not saying a whole lot.

Nintendo is also in a bad spot globally. Europe is not a massive market for them, the onslaught of JRPGs and Japan-focused titles coming in 2016 makes even staying competitive in Japan a big challenge with NX. That leaves the US, where Microsoft is strongest. Sony is without a doubt winning everywhere, even in the US, but MS certainly isn't marginal here. IIRC, PS3 was always around 2/5ths of the US market at best vs 360, while the US PS4 v X1 battle is more like 55/45 LTD, with the potential for Sony to extend that to 60/40 or so and beyond as the gen goes on, but even 40% split with PS is a ton of install base.

I'll continue to enjoy Nintendo's 1st party efforts as they come, but I just have my most serious doubts that they'll be able to be brave and bold enough to challenge MS to any legitimate degree. They COULD, but I don't think they will make those decisions. We live in an era where 3rd party is absolutely dominant, and 1st party exclusives mean next to nothing in the sales race. So Nintendo's best asset (1st party quality) is weaker than ever, while their weakest element (3rd party support) is absolutely critical to surviving in 2015 and beyond.

I'd put the odds of this being Nintendo's final console at greater than 50/50, and that makes me really sad. I guess we will see.

halo is not declining , sorry that's your personal opinion, just like I think its just fine. I firmly think in the end its sales will be their.
I also think Nintendo doesn't want to compete with anyone with power, they always just do their own thing and because of that they never will get the 3rd party support that is needed to reclaim the news, devs and worldwide support for a return to the old days for them. I would like that to happen but I think Nintendo doesn't want to truly go all in anymore.

Things are fine the way they are. Until Nintendo do what they did with NES/SNES, they don't deserve to be even second. I remember such a robust and AWESOME library like Shadow Of the Ninja, Backstreet Brawler, Double Dragon, Bad Dudes, Magic of Scheherazade, proper Metroid games, The Guardian Legend, Xexyz, River City Ransom, etc. The diversity AND quality was insane across 1st, 2nd, and 3rd party. Sony may not have matched that outside of PS2 era yet, but has gotten close to it and their handheld deserved more love than 3ds. I mean Freedom Wars is amazing, Soul Sacrifice, Ragnarok Odyssey,KZ:Mercenary, countless well made ports such as P4G, Resogun, GOW series,etc.
I don't care for a 15th Mario game unless the awesomeness is as comparable to me as it was from SMB1 to SMB3 (my favorite in the series), just like I wouldn't want a 17th remaster of GOW Collection.