Different markets, Nintendo won't be competing for HD gaming, best graphics etc. They haven't for a long time as they understand they have games that everybody loves, Mario, Zelda etc. This will sell a lot, maybe not as much as people are hoping but it will definitely help them get back into the market.
Why would they want to release their games on MS or Sony platforms when they know they can sell enough on their own for profit. This in a way makes me prefer Nintendo to others as it ensures they make good games, not rushed for profit or put out half assed games as they know it will sell.
They have IPs that will sell their hardware without needing 10 TFlops to boast about.








