"Nintendo makes consoles only for Nintendo games" Myth or fact?

[Pemalite]

I am going to go with "Myth".

Nintendo designs a hardware platform to meet certain price/performance/feature targets, which is no different from Microsoft, Sony or even other historical platforms like Atari, Sega, Panasonic, Fairchild, Mattel, Coleco, NEC, 3DO, Fujitsu, SNK, Pioneer and more.

That price/performance/feature set then either appeals to a development studio... Or it doesn't.
Nintendo hasn't purposefully excluded outside development studios.

Nintendo's internal development teams are given what they get, they don't really get the option to choose what hardware they develop their games on and need to do the best with what they are provided with... Which is no different from Microsoft/Sony today.