You don't beat apple at their own game, you change the game to take Apple's advantage away from them ...
Off the top of my head, something Nintendo could do is to convert their games into platforms for small companies. Essentially, you start to develop console games with the intention of creating a professional mod-scene around them. Nintendo doesn't need to develop a new gameplay mode in Mario Kart, or create new downloadable tracks, and with a well designed system small companies could produce these assets for Nintendo and have them sold for a small fee through Nintendo's app store; certainly, Nintendo would have to review all content and make sure that it was of adequate quality, but a good mod team might be able to produce a new and interesting content rapidly (releasing every few months) and to sell enough to be highly profitable.
Essentially, many small studios would jump at the opportunity to be able to target the massive audiences of many of Nintendo's big franchises. While Apple has a ton of simple games, and a ton of clones of those simple games that were successful, Nintendo could have a massive quantity of more complicated downloadable high quality content.
