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Nintendo would still be losing money per console sold, and its box would sell even less at $500+. Or is Microsoft going to take that loss too?

It would save some HW dev costs, but that's not why Nintendo is losing so much money now.

Power will not grant proper third party support, and even if it happens there's no guarantee that people will buy a Nintendo system for third party games.

At the end of the day, not worth it.