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The main pro if this rumour is true is that the console could well end up being the successor to Wii U, 3DS and Vita (since Sony don't appear to care about handheld anymore) all rolled into one. Which means it would completely own the Japanese market and in addition to having all of Nintendo's releases on a single console, it would probably get the bulk of support from Japanese publishers (Namco, Capcom, Atlus, Square Enix).

The main con is that Western publishers (with the possible exception of Ubisoft for one or two things) would still snub it. That's not much of a con to me personally as I loathe most Western publishers, but I know a lot of people care about it.