I kinda think of this way ... stop thinking of the console/handheld as the sun/center of the universe.
Think of the Nintendo Network (from Nintendo + DeNA) as the new sun.
Everything orbits around that, and all your Nintendo hardware for the next 10+ years with operate around that.
Hardware refreshes will happen more often, but it will feel seamless for the consumer just like you don't ever feel like you're starting from ground zero when you buy a new iPhone or iPad from an existing iPhone/iPad. Or say if you upgrade your PC ... your STEAM service is still there, so it feels like a seamless transition.
Expandable console IMO is a realistic option today if the console is based on mobile parts, you could stack 2-3 of them together and still have a very small form factor + electrical consumption.
First gen mobile portable with a 720p screen, second gen with a 1080p screen and so on .... yeah I can see that too.
All sharing the same games more or less but the user can upgrade at their own pace.
The fact of the matter is the old rules of how the console cycle works don't benefit Nintendo any longer. Why keep playing the same game that you keep losing at? Change the rules, there's no rule that says consoles/handhelds made in 2016/2017 must adhere to the same basic concept of a console made in 1983/1985. In fact it's fairly backwards when you think about that the game business more or less still operates under the same principals the NES did.
