I'm amazed no one has stated this already. The loss of Nintendo from the hardware side of the industry would be disasterous.
10 years ago, I would have said it wouldn't have mattered much, but since then they have launched the DS and Wii.
If you look at the NA market (and the same is true in JPN, not so sure about Others) the industry peaked in 2003! After that the market was shrinking! Why? Because there was no innovation, it was the same games, over and over with more complicated controls, prettier graphics, etc. It was stagnating.
For two years the market shrank.
Then Wii launched in '06 and the market made a slight rebound (PS3 & 360 helped).
In subsequent years the market DOUBLED in size. In '08 the NA gaming industry was TWICE the size it was in '03. That is almost entirely on the back of Nintendo's hardware openning up gaming to new people.
Portable gaming is a similar story with DS.
If Nintendo hadn't produced the Wii & DS where would we be now?
'06 would have seen a slight increase over '03 with new system launches but then it would have further retracked and shrunk. Think about it. You had a choice of a $400 system or $600 system both of them almost identical in everyway (except PS3 has a blu-ray player). How would that grow the market? It wouldn't. The problems that led to the market shrinking in '04 and '05 still exist today on HD consoles except they are even worse now due to the high cost (and risk) of HD gaming. How many studios have cut studios, cut games, cut new IPs and everyone is now looking to focus on fewer, better games. Fewer games, and a lot less innovation would only cause more shrinkage in the industry.
Without Nintendo making hardware gaming would not be gaining mass appeal, it would be becoming ever more the 'nerd gamer' industry, much like the comic industry is stuck selling onto to a small market despite having properties of massive mainstream appeal.
Without Nintendo making hardware this industry you all love would be continuing to die a slow death.
Essay Pro