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There is no room for 3 consoles but Nintendo is not part of the main market anymore. For most gamers, Nintendo systems do not exist, this is why all 3rd party developers already left the sinking ship.

Nintendo created its own small disconnected niche market and has no chance to compete with PS4 or X1 with outdated and ultra-weak hardware. But most Nintendo fans continiue to play Nintendo games only and do not care for the rest. This very small but loyal fanbase however might not be enough to be profitable, this is why Nintendo reported loss after loss with no turnaround in sight.