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It's not so much is the relationship mendable, it's can Nintendo get people who actually buy third party games?

By ceding the entire core console market to basically Sony and MS without a fight, Nintendo's console audience mainly buys Nintendo games, or during the Wii craze, Nintendo games + casual mini-game-athons of dubious quality (that fad has died).

They need to at least target XBox IMO (Sony is too strong right now) and win back some of these consumers otherwise it doesn't matter how lovey-dovey Nintendo and third parties are because this is a business and it won't be a good business for third parties.