Reggies Thoughts on Nintendo Going Third Party.

[Louie]

I agree with him that Nintendo shouldn't go third party. Nintendo's integration of hardware and software can be a huge asset, but only under the right circumstances.

There are some really fascinating scientific studies as to when integrated hardware and software (Nintendo, Apple, etc.) can be harnessed to become highly successful and when they are more of a liability:
If a new technology is *not yet good enough* for customers the company with integrated hardware and software almost always becomes the market leader and reaps in insane amounts of profits (NES, Gameboy, Wii, touchscreen DS). But once technology becomes "good enough", integration of hardware and software ceases to be important - instead, competition revolves more around price and customisation of a product - the integrated company suddenly falls behind its competitors.

And this makes so much sense when you think about it! When was Apple most successful in its history? In the early Mac, iPhone, iPad, iTunes, iPod, iMac (internet computer) days - when the technology wasn't "good enough" yet and integration of hardware and software gave them a boost in quality over competing products. When did Apple's success slow down? Whenever a product category matured and customers thought the products were "good enough".
When was Nintendo the most successful? During the NES, Gameboy, DS (touch / dual screen) and Wii (motion control!) days --> the more mature a technology is the worse Nintendo's products do.
Nintendo going back to motion control and going for a hybrid design (new "technology" in a broader sense) is perfect for them because motion controls aren't "good enough" yet and hybrid consoles are just nascent right now. Nintendo has to use the advantages of an integrated hardware and software approach, instead of competing with Sony and Microsoft in their home turf. Then they can be wildly successful.