I think, if forced to choose, Nintendo should invest its resources in a portable system for the ninth generation. As we've seen from 3DS, some series once alien to Nintendo handhelds are now viable, e.g. Smash Bros. Plus many of Nintendo's biggest sellers, including Pokemon and Animal Crossing, translate better to handheld systems. Lastly, Nintendo has a 25-year history of dominance in the dedicated handheld market; it remains a strong brand, despite challenges from Sony and from smart devices.
My personal preference? Nintendo designs a ninth-gen console. Why? Over the last three decades, Nintendo's software output on consoles has been markedly better than its output on handheld devices. Plus, local multiplayer is easier and less costly with a home console.
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