Did Microsoft just force Nintendo's hand?

[ToxicJosh]

It's not as simple as market share=profits for Nintendo.

For Microsoft and Sony, losses on hardware are recouped via; 1st party software sales, 3rd party licensing fees and subscription fees. In fact, assuming this gen lasts 10 years, that's a potential £600 per customer extra over the course of the gen (PSN, £5 a month, for 10 years). So Microsoft and Sony can safely lose money on hardware, safe in the knowledge that those losses will be recouped by their subscription costs, as well as licensing and sales.

For them, the market share is crucial, as it can help lead to their platform being used as the lead by 3rd parties, giving them the definitive version, leading to a better public perception and ultimately, more sales. This is why Microsoft is keen to improve market share; it makes their platform more viable longer term.

Nintendo, conversely, only has 2 real sources of income; hardware and 1st party software (OK, and Amiibo, but that's as yet undeveloped*). There's no subscription that will offset hardware losses, and 3rd parties have well and truly abandoned them. Cutting revenue to increase marketshare will not, as it would for Sony and Microsoft, pay dividends in time.

3rd parties aren't going to turn around and come back to Nintendo this gen. It takes 2 years to make a game, so companies have to think 2 years ahead to see if investment is worthwhile. The Xbox One probably looks safe, especially considering its comparable specs and recent turnaround, the Wii U certainly doesn't.

Nintendo, therefore, has no real incentive to attack market share, when they can instead focus on profit.
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*Amiibo could well turn out to be very lucrative for Nintendo, and may well end up playing the subscription element in their business model. If a good proportion of Wii U and 3DS owners buy 3/4 amiibos a year, that would replace the income generated by Microsoft and Sonys subscriptions.

Indeed, if amiibos continue to sell well, they might well be integrated into the next Nintendo console's strategy to the same extent that subscriptions are to Microsoft and Sony's