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Awww, guys, can't you just think in theoretical terms for a second? The OP just posed an innocent "what if?" scenario.

I'd say they ought to buy Microsoft. I think Microsoft does a better job at cutesy/kiddy than Sony, and their exclusives as of late seem more vibrant and lively than that of Sony. (Sony does experimental the best of them all, but Nintendo is a more traditional kind of company) Plus if Nintendo was so strong, they'd have most of the Japanese third party anyway.