I don't really understand why the arguments are tied together. Nintendo could easily create mobile games while maintaining their presence in the hardware world.
I don't really even see how developing mobile games would hurt them. It's not like Nintendo doesn't make spin-off games quite often. A spin-off Pokemon title for phones would only increase the user-base, for example. A Pokemon Snap would be wildly popular. They could even use lesser franchises instead, like Kirby or Star Fox (!).
One of Nintendo's failings is that they often resist new trends until the market forces them, like an account system or a fully-formed internet infrastructure. At least they're getting into mobile somewhat with that Pokemon Tap app.








