Why Nintendo should stay first party

[Soundwave]

This is the type of deal it would take for me if I was running Nintendo to consider dropping dedicated console hardware:

- Alliance with Sony (sorry MS, don't trust you).

- 5-6 year term, at which time Nintendo can opt out of any agreement.

- Nintendo receives a 20% cut of Playstation royalty fees and a 20% cut of all hardware profit. In exchange they will make games for the PS4.

- Nintendo does not have to pay Sony any royalty fees.

- Sony and Nintendo agree to jointly develop a portable platform, Sony will make games for this platform, but Nintendo will be the lead brand and have lead control over it. Platform can be integrated into Sony cell phones, but Nintendo receives a flat-rate of $75/unit profit and the majority control over third party licensing fees.

- Nintendo/Sony agree to work together to bring certain Nintendo IP to television and movies, namely Legend of Zelda and an CG animated Nintendo Universe film (ala The Lego Movie and Wreck It Ralph).

In other words, it would have to be a very sweet deal. Though I think Sony would profit rather nicely from this setup also (Vita makes them nothing, getting in on Nintendo's next-gen portable and being able to integrate Nintendo's IP offerings into their cell phones would be a huge win for Sony).

Sharing some of the profit from the PS4 would string Sony a bit, but at the same time it would probably be a deathblow to MS by getting so many extra exclusive IP at once on top of already having momentum. With MS in the rear view, Sony wouldn't have to worry as much about doing things like price matching on price cuts or money hatting other third party IP.