That would lead to a console market crash if they made powerful console hardware, every console (PlayStation, Nintendo, Xbox) would be the same and competing over which is more powerful. Powerful 4k systems like the Xbox Scorpio are being rumored to cost $500!!! POWERFUL CONSOLES ARE JUST UNDERPOWERED PC's! People would rather buy a PC then a high power console. If all 3 developed the same type of console I think there would be a console market crash.
However Nintendo always brings something new to the table and its not always a gimmick. Nintendo is the unique one that innovates in gaming through many different ways: touch-screen, motion controls, rumble, hybrid console, etc.
Nintendo would straight out die if they went and made a traditional console; Sony and Microsoft already own that area.
