If I'm Nintendo I'd propose a counter offer, take it or leave it.
1.) Nintendo gets a cut of every Android gaming app sold. That means everything. Angry Birds, Farmville ... whatever. If Nintendo is to grow the Android gaming marketplace and drive it to be the no.1 gaming area of choice, then they should ask to get a reasonably sized chunk of that wealth.
2.) Nintendo gets to control the design/specs of every Android gaming device. That means for a Android device to be able to play Nintendo games, Nintendo can mandate that the phone design must have a d-pad + physical buttons + analog stick (like the Xperia Play only not as crappy).
3.) Google is prohibited from any kind of take over attempt or buying of Nintendo shares.
4.) Google is prohibited from making any type of deal (ie: Sony) with any other company regarding gaming.
5.) Nintendo is free to market/sell their own handheld only gaming devices independant of Google as long as they agree not to work with Microsoft or Apple's competing cell phone OS'.
In return for this Nintendo agrees to assist Google in development of a gaming platform on Android phones and agrees to integrate Google services into their consoles as well.
You want Nintendo, Google? Then make them an offer that they can't possibly turn down.
Nintendo already turned down a $25 billion dollar buy out attempt from Microsoft and that was 10+ years ago when their cash pile was maybe 1/3 of what it is today.
