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No, Nintendo shouldn't leave the home console business for the handheld business / mobile market because that will actually make them earn much less money. With both a home console and a handheld, they would make profit from both the consoles themselves and their games.

What they are planning is likely an architecture similarity approach, where both the handheld and their next home console will share the same architectures, with the home console obviously being much more powerful than the handheld, making development on both platforms very easy. Even porting games from the home console to the handheld or vice versa would be easy and lessen development times.