Even if Nintendo "farmed it out" -- this would not be uncommon.
After all, Namco and Hudson (among others) have developed titles for Nintendo that were released by Nintendo and considered "first party games."

Mike from Morgantown

I just dont get it... :(

I think I'll wait for official details.

It's amazing how much video game development has expanded over the years. Back in the day, the lead designer was almost always also the lead programmer (maybe things were different in Japan where they have that whole "Director" thing going on). Nowadays you'll often see companies have dozens of employees dedicated just to design. Crazy. And now you have a studio like Mistwalker dedicated entirely to design.

It's no wonder why game design is so uber-competitive. Everybody wants the glory (not to say it isn't hard work. There are a lot of boring aspects to game design and many amateur aspiring designers find that out after fooling around with RPG Maker, which requires zero programming knowledge, for a little while). Not many people want to do the grunt work (coding).

I thought the headline was pretty obvious... why would Mistwalker change the way the develop games?

A bit disappointed. I know feelplus worked on Lost Odyssey, but I was hoping Nintendo was involved in some way.

im intrigued as to what nintendo team people thought would be coding?

I'd guessed Game Arts, due to their RPG pedigree and close relationship with Nintendo.  Artoon makes me happy though, Blue Dragon is pretty easily my favorite HD RPG so far.  Awesome job system, here we come! :D

The Last Story is co-developed by Nintendo/Mistwalker.

The Last Story is a Nintendo IP.

again that is not a nintendo team. it would be like saying gears of war is developed by microsoft. its not.