If the game business went back to just a 2 horse race between Nintendo and Sony, Nintendo wins huge in that. They'd be guaranteed a 50 million userbase at least IMO even if Sony "wins" ... and wouldn't have to rely on risky/fickle audiences like casuals that turn abandon them on a whim.
The real problem here as I see it is how much control would Microsoft have? And what exactly would stop Microsoft from buying out Nintendo at a later date if Nintendo did a little too well?
That's what I think Nintendo would be afraid of.







