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pokoko said:

As far as games go, we probably would not see projects like Bayonetta or W101.  However, Fire Emblem and Xenoblade are owned by Nintendo and it's quite possible they would continue. 

I don't think they would. These are basically games designed to diversify their system library so that people buy their platform to also buy their other - more popular - titles. They aren't produced to make huge profits. Without the incentive of selling hardware, Nintendo would make Mario, Zelda, Pokemon yearly and forever. Like pretty much every other third party publisher, they would stick with their stable IP's and only try new titles out of artistic curiosity, but with the contraints that they must be profitable. Furthermore, Nintendo does not have the control over the hardware that they are used to, limiting their ability to develop for the platform to its fullest extent. 

Possibly there would be gains by not having hardware development costs (albeit software development costs will rise, and software revenue will decrease due to licensing fees, and such), but ultimately they will probably be negated by the losses. Profit-wise, I would think Nintendo would remain very much the same, but instead of diversity - which we all want from Nintendo, we will have stagnation.