With so many changes looming for the game industry in the next 10 years, I think Sony + Nintendo would be better off teaming up to form an "alliance" rather than trying to compete against each in a split market and possibly being broad sided by outside forces like Apple and free-to-play Facebook/Flash gaming. Not to mention Microsoft.  Before you spit out your cofee, hear me out:

They're both Japanese companies and with Kaz Hirai tipped to be the next Sony president, this is someone Iwata (another Japanese gaming guy) can really work with, this isn't some guy who doesn't know anything about the game business. With the Japanese game industry failing, the coming together of these two companies could kick start the Japanese market again. Together they could control virtually 100% of the traditional handheld market and be able to integrate a joint portable platform into their own branded cell phone devices with real gaming controls.

Nintendo put Mario on iPhone? Never. On a platform that they have major control over and have a share in the profit and full design input on? With a fellow Japanese company? OK, now you probably got Mr. Iwata's attention, this can be Nintendo's "answer" to the rise of cell phone gaming (and Sony's too) ... one in which they have control and a stake in all hardware/marketing/software decisions.

 Their franchises just compliment each other very well too, Mario/Zelda/Pokemon/Mario Kart/Wii Fit with Uncharted/Gran Turismo/God Of War/Killzone/LBP is a 1-2 combo of exclusives that appeal to virtually every demographic you could think of. Such a console platform would be gaurunteed 100-150 million unit sales every time out, without the need for Nintendo having to pull a "Wiimote" miracle out of their R&D every 5-6 years or Sony to get back all the 3rd party exclusives they've lost. It gives both companies an assured massive market userbase that they both crave to sell their own IPs to.

Combined it would be easier for the two to fend off things like unfavorable currency losses as they could split those as well (this is killing Nintendo right now), they could also split things like hardware costs, have joint R&D (Sony obviously mirrors Nintendo's controllers, why not just work together). They could operate like the Blu-Ray/DVD consortiums, except it would only be the two of them, and they could split 3rd party royalties between each other, keep profit from their own titles seperate, and share marketing costs.

I think this can be an answer to long term problems both companies. Neither stands to win if 99 cent cell phone gaming continues to grow. Neither stands to gain anything if Microsoft continues to grow in the industry. Both are wary of Apple I think. Both stand to lose if the Japanese game industry continues on its downward spiral. Perhaps once they were bitter rivals, but the 90s are over. Nowadays, it seems to me that their common interests are starting to out weigh their differences.

I just threw up a little in my mouth reading the title.
TL;DR

It will NEVER EVER EVER happen!

Even though I understand what you're trying to say, one console which has the content of games for PS3 and Nintendo combined, which will speak to every gamer (casual, hardcore,...) would be awesome!

But Nintendo and Sony are 2 totally different companies with their own vision and strategy!

They're both Japanse, but that doesn't mean anything!
Microsoft and Apple are both American... are they the same?
They didn't get along in the N64/PSX era, and the industry wasn't as competitive and hard as now so...

Keep dreaming!

You started your thread with the words: "With so many changes looming for the game industry in the next 10 years..."

The changes that I am thinking about could leave Sony and Nintendo in a better position individually over the next ten years.

I believe there will be a battle to be fought and won over the emerging economies and both companies (more so Sony) are in a position to exploit the projected growth of gaming in the Eastern markets.

It would be like the Spider-Man (produced by Sony, btw) series. First Spidey and Harry were friends, then they became enemies when Harry found out about Spidey's betrayal. Finally, they became friends again at the end and took down Venom and the Sandman!

Sony=Spiderman: Became super powerful because of a freak course of events and keeps fucking up for no reason. They talk a lot of shit, too.

Nintendo=Green Goblin: Super rich and takes away the women of their former friend.

Xbox= Venom: A rip off of the star. Could actually be more powerful but they are pure evil.

Apple/Android=Sandman: Dirty. Easily more powerful than all of the others and irritating when it gets in your ass.

I'll say nah, but Sony needs to revive their samurai spirit back. like the ps1 days

That's good. Maybe they all get together like a Marvel Team-Up to fight a yet to be identified foe.

While I would absolutely love it if they could make this happen, I don't think it ever would. Sony and Nintendo tried working together in the past to create a CD add-on for the Super Nintendo (similar to the Sega CD only far better). The team up fell apart, Sony took what they learned and released the Playstation, which dealt Nintendo a serious blow when they decided to stick with cartridges for the N64. Nintendo also tried teaming up Philips to do the same thing, and that team also fell apart leading to the CD-i and the infamous Hotel Mario and Unholy Triforce.

So yeah, while I would love to have Sony and Nintendo exclusives all on one system, Nintendo has been burned enough in the past that I don't think it will happen.

TBH I see far, far more chance of a MS/Sony tie up at some point. There are far more and better synergies between those two than Sony/Nintendo. In fact, part of me can't believe how much money Sony and MS have burnt between them competing for a market they could so easily co-exist in.