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Fusion is going to happen, I think people just need to get to terms with it.

There's not a chance in hell Nintendo would be able to support a distinct PS4+ level console and a XBox 360-ish portable next cycle with completely distinct software libraries released at any kind of reasonable rate unless they like doubled or tripled the current size of the company, and Nintendo will never do that because it would destroy the culture of Nintendo which is very tightly controlled and managed. They are a small company and they WANT to be that way, too many people on the internet do not understand how much Nintendo values their company culture.

But they cannot keep that and continue to have ever increasing technically more demanding separate hardware and handheld lines.

They're clearly buckling under the strain as is, they aren't able to deliver Wii U and 3DS games consistently as is, yet there is a contingent here who thinks "well ho hum, now gimme an even more powerful console and handheld". The days where the Game Boy/GBA line was clearly secondary on the development front to consoles and portable games could be made with just 10 people are over for Nintendo. That setup isn't workable anymore when Nintendo's portable games require large resources. 

Fusion is the only way Nintendo can have multiple hardware lines (home console and portable) just from a PRACTICAL standpoint. Otherwise they are going to have to chose one, and portable only likely has to be the choice simply because their portables have been more successful than their consoles for 20 years running. Fusion isn't an option for Nintendo, it's likely the ONLY option they have if they want to continue with multiple hardware lines (a portable + home version).