All First party Nintendo software production is run through the Entertainment Planning and Development division, led by Shinya Takahashi. In addition to having its own internal production groups, EPD also has teams dedicated to oversight of Nintendo's external developers and games such as MonolithSoft, Intelligent Systems, Camelot, HAL Laboratory, Retro Studios, Next Level Games, among others. However, what if we could take it a step further. What if, Nintendo decided to do yet another restructuring, this time it's a bit radical. The bulk of the changes going to EPD, all of its internal software groups would be spun-off into their own independent development subsidiaries. Each with its own name, management, and development culture. Shinya Takahashi will still oversee all software development, and Producers who mainly oversee outside companies like Hitoshi Yamagami and Kensuke Tanabe will continue their roles in new positions. Under this new structure, EPD would strictly be an oversight department, possible with a new name as well, rather than a development department with oversight duties. It'd be similar to how Sony Interactive's Worldwide Studios operates, or the experiment Sega tried during the Dreamcast-era, where they split-off all their in-house development departments, into independent subsidiaries.

This probably won't happen... Ever. But it'd be interesting to see Nintendo take a big risk like that.

Why? What would be the point? You don’t think the system Nintendo currently uses is producing quality work?

That is basically the system that was in place before Nintendo merged everything into EPD. They had 5 different EAD software group, each dedicated to specific IPs. 

I believe Nintendo has felt the need to pool all resources into one single development beast, as the average yield of all EAD individual teams was pretty poor at that time. It's a creative way to speed up output and increase efficiency, as teams are able to share expertise, standardize proprietary engine development and dispatch human resources in a cost-effective procedure. 

I do think this was one of the smartest moves by Nintendo, as the ouput has never been as good as today, quality and quantity-wise.

The only benefit I can see to this is the same reason SEGA did it; to allow each development team to define their own personal styles. Each of SEGA's development team had their unique flavor. They produced very different things.

That's actually how EPD is still set up. There's 11 individual production groups, some mainly work with outside companies, some work on their own games internally, and some do a mix of both. What changed was that Software Planning and Development was merged with Entertainment Analysis and Development, thus creating EPD. The structure I'm proposing, is the internal software R&D groups would be split off into their own autonomous studios.

The only benefit to this is console wars "Studio" lists. That's it honestly.

Sony and Microsoft might have a structure like this, but that's because those studios are technically not "internal" in the sense that they're acquisitions owned by the parent company. They already belonged to a different location.

That is not true. Nintendo EPD output lately has been abysmal. What have they made for the Switch? BOTW which was just a Wii U game delayed for their next system. Mario Odyssey, Mario Maker 2 and Splatoon 2. Those are the only well received ones barring those they’ve made Arms, 1-2 Switch, Labo. That’s it. 

With 11 teams and given how small scale most of Nintendo’s games are we should expect a lot more. I mean these guys aren’t making huge games with cutting edge visuals and detail that they need 3-5 years to put out a game.

You're also forgetting Sushi Striker (Which is an EPD creation co-developed with indieszero), and Animal Crossing New Horizons, as well as Ring Fit Adventure. 

You have to remember that Nintendo typically focuses of the first 2-3 years of a console's life for the first wave of software for a new system, that plus the fact that most of their staff was consumed by BotW at that time, so it often takes a while for new projects to start up after such a big release. 

Also Nintendo's internal teams have never been the majority of the company's yearly output, even before the Switch, EAD and SPD together have only ever put out 4-5 games a year. Besides, EPD doesn't just do internal R&D, they also have oversight of all of Nintendo's externally developed games too, so they have more responsibilities beyond just making the next Mario and Zelda.

Sorry, but I don't think that's a good idea.

You need to research something called "integrated software and hardware development". Apple is like this. The big shareholders from Nintendo are well aware that this is one of Nintendo's biggest strenghts. That they have integrated development.

Sony and Microsoft don't have integrated development, they're segmented. And this places them a step behind Nintendo. People who truly know about business in modern times are WELL aware of this.

As someone who was victim to the massive confusion around organizational restructuring every time some new executive wanted to try to show off, I will say that I am morally against any reorganization when stuff clearly isn't broken to begin with.