Revenue isn't the primary number in this discussion. It doesn't really matter how much money you're bringing in if it's exceeded by your expenses.
What we should be talking about with regards to Nintendo is A) does hardware turn a significant profit, and B) would software sales drop dramatically if not supported by an owned platform. Hardware is expensive, so obviously revenue would go down without hardware sales, but again, the bottom line is more important.
The first question is kind of hard to answer. Nintendo has a long history of profitable hardware--until the 3DS and the Wii U. The 3DS was a strange situation which didn't last long so we'll toss that aside as an aberration. The Wii U is the real problem. As far as I know, it's still not profitable, which means it might never actually sell enough units to be profitable over the full run of its life-cycle. That would be fine if the console is being projected to sell like hotcakes after it turns profitable but that doesn't really look to be the case.
Therefore, if the Wii U is the base-model of Nintendo's console business going forward then it doesn't look like a profitable aspect of their business when considered in a vacuum.
However, it is entirely possible that Nintendo has learned some things from the Wii U--like the fact that expensive gimmicks are a bad idea--and they will go back to building consoles that are profitable from Day One or close to it. If they did that, then less revenue would not matter, as they could still turn a profit with a lower amount of consoles sold.
That leaves us with a discussion about games sales if Nintendo went third-party. IF Nintendo sold the same amount of copies on Xbox, Playstation, PC, and mobile devices as they do on their own systems then I think there is no question at all that their profit per employee would be insane. The overhead for game development and publishing would go up somewhat, yes, but it would be a drop in the bucket.
But would that really be the case? I honestly don't think so.
In my opinion, without an owned platform, sales of most titles would begin to sink. That captive audience would be released out into the wild with more choices than Nintendo consoles have seen in a long, long time. Dedicated, Nintendo-only fans would become a dying breed. Ten years down the line, I simply do not see Mario titles pulling down the same numbers. Pokemon might be an exception, though, if it ended up on mobile.
Still, I think being software-only would be less of a gamble. I think they could easily turn a profit every year, though they'd likely shed a lot of employees. Hardware can be a massive boost if done well or a massive drain if you screw up. The Wii U following the Wii is a prime example of that.
My opinion on Nintendo's best possible path is to continue making hardware, but ONLY if it's cheap and profitable at launch. They don't need to "win" a generation as long as they're turning a slight profit on hardware and selling a ton of their own software. Second or even third place is fine. They just have to convince their fans of that.
