Why Nintendo shouldn't suck up to third parties

[famousringo]

Train wreck said:
This is an unsolvable problem for Nintendo, because the only realistic solutions would be to either pay off third parties for ports (thus ruining profitability).

How is it ruining profitability? If a said multiplatform game is not coming to the console, Nintnedo receive zero dollars. Paying for port guarantees some level of profitability in that Nintendo would receive royalty payments.

You know, there is some merit to this argument. As the only hardware manufacturer with a history (tarnished this generation) of earning profit on hardware sales, and as perhaps the most successful publisher in videogames period, Nintendo is in a unique position to offer access to their platform with no licensing fee.

Paying 3rd parties in the hope that sales are high enough to recoup the cost is a risk that Nintendo would have to be very strategic about taking, but forgoing license fees could allow Nintendo to profit off increased hardware sales and the sales of Nintendo software which would follow, and entice 3rd parties with more profit per unit than they could possibly see on rival platforms. It's a deal Sony and Microsoft can't afford to match.

Niether 3DS nor Wii U are a good opportunity for this strategy, though, as they aren't compelling enough to sell hardware at a profit. And there's the problem. If your hardware struggles to sell, you need what little licensing fees you get to stave off the red ink, if your hardware is a smash hit, you're bound to get at least nominal 3rd party support and you're leaving money on the table.