That's exactly the point. Microsoft is not a hardware manufcaturer at heart, they are a software company. They bought their way into the market by losing up to $1bn a year for more than half a decade with their Xbox business. If anything this proves my point: Even a software company can get into the hardware business by pumping lots of money into it. That's exactly what Microsoft did with the original Xbox and Xbox360. But with their current Management they are now forced to turn a profit. (I was wrong saying Microsoft was willing to put more money into it, though. You are absolutely right: Sony would take more of a financial hit).

My point is: Sony and Microsoft are bigger companies with bigger cash reserves, way higher yearly revenues and a bigger workforce than Nintendo. Whenever Nintendo releases a sustaining innovation (i.e. a faster console, a more hardcore controller, etc.) Sony and Microsoft can outcompete them and make something even faster, more connected, more hardcore. That's why Nintendo modeled the Wii as a disruptive innovation instead of a sustaining innovation: Disruptive innovations make it very hard for established companies to react to them (in the case of the Wii the backlash from the hardcore gamers was so strong Sony and Microsoft didn't dare releasing their own motion controller for years, and even then made them an accessory. Also, Microsoft failed at making Kinect a central part of Xbox despite trying to position it as a hardcore gamer device.) 

You should look at Sony is doomed threads more often...

Sony doesn't exactly have cash reserves and their assets are greatly depreciated. They can't and won't plummel a lot of money on PS, they are putting the money necessary to turn a profit on it.

And seeing the very ortodox consoles of this gen and the rumour of the mid gen, Nintendo wouldn't need a lot of cash on PD to release a good console with competing power to keep up.They even said the main reason they don't compete for power anymore isn't lack of money (they have much more than 1B in reserves to put on it if they wanted, and a lot more than Sony can) but that they don't need more power to run the games they want to put out. Nintendo is working on a very silo like attitude.

Haha, yeah I probably should! 

But isn't that exactly the situation we are in right now? People said NX would succeed because of power and now they realized Sony and Microsoft are able to outcompete Nintendo in that department yet again, by releasing PS4Neo and XboxScorpio. They don't even need to take a financial hit to do so. (And we all know people will complain about NX's online connectivity :P). The point is: If Sony and Microsoft can just put out even stronger consoles, is it really wise to make power NX's selling point? 

An upgrade on what?

From the leaks we are getting 

XBox 2/Scorpio - 6 TFLOP performance (5x the XBox One)

PS4 Neo - 4 TFLOP performance (more than 2x the PS4)

Nintendo NX - 1-1.4 TFLOP performance (closer to the XBox One, even that might be stretching it .... according to Emily Rogers). 

If Blackberry makes a new phone that's 5x better than their previous phone, but is still only 1/3 the performance of the new iPhone/Samsung Galaxy model, is it really an "upgrade"? 

The Wii/Wii U strategy of using outdated hardware has put Nintendo in a bad position now where they are effectively 4-5+ years behind Sony/MS constantly. 

Man, no they couldn't. :p  Nintendo does not have the financial resources to outcompete Sony and Microsoft, because those two are willing (and in the case of Microsoft financially capable) of subsidizing their console businesses with billions of dollars if they choose to do so. I'm not saying Sony and Microsoft are "better" companies, just bigger ones. 

Sure, Nintendo has quite some cash. But they can't lose money for three consecutive years and they don't have the overall resources to compete directly with Sony and Microsoft. For instance, they don't have the in-house knowledge and manpower to compete with them when it comes to online infrastructure and feature parity of their consoles. But that's just one example. Nintendo's profits have plummeted bady over the last 5 years and they had to scale back their business already (they layed off staff in Europe , scaled back their presence at events like e3 and generally had a very "safe" software output for the last few years).

They can put stronger console because nintendo have been releasing 1 gen late HW. If for 2017 they release console with PS4 like power it isn't hard to see how easy it is for PS4Neo And X1Scorpio to outdo them.

Now if they release a spec close to PS4N and X1S them they will be close enough.

It isn't wise to make it the selling point, games are the selling point. But if you make it 1 gen late to the party them 3rd party support will be even harder to get.

They see me trolling....

Seriously with the year nintendo has planned for the wii U in 2016.... NX should have been out this year.

2018? at the rate the wii u is going, cant take that seriously.

Best case for Nintendo? was to have their NX launch before the PS4 Neo & XB1 Scorpio.

Now it wont have any time on top!

Even the Wii U launched near the end of the PS3 & XB360 life time, and had abit of time as the topdog.