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PlayStationLegend said:
*sighs*

Won't happen. Will not happen. Cannot happen.

As for the idea... it's fanciful. Microsoft and Nintendo have completely different philosophies as companies. Their direction (in the market they are aiming at) is the opposite.

This doesn't preclude either company from going in their different directions during that platform generation.

For isntance, Nintendo could offer a console without Kinect or TV integration (Xbox One Guide).  They could offer their own Game Store with only their games or games developed for their console and games developed for the MXO platform.   

Again, what Microsoft offers them is everything they don't have.  An OS, as well as a mature and solid development platform and online service.  Likewise, Nintendo offers them the one thing Microsoft doesn't have, a handheld gaming platform.   Nintendo can, rather than focus on building the things it doesn't have, have instant access to them.