With Nintendo's library, I think the sweet spot would have been a console with a cheaper price, which could have been reached by ditching the game-pad.
For Nintendo to go head-to-head with the PS4 or XO, they'd have to improve a bunch of other areas of their service. Generally speaking, they get away with those differences because they're usually the cheaper option. If they're the same price, though, those problem areas become major points of comparison.
Basically, Nintendo would have a LOT of catching up to do to compete directly with Sony and Microsoft. I don't see them burning through the money it would take to do that in a quick fashion. Better they aim for a different niche.








