It sounds like you're assuming that Nintendo's software business is profitable because of the existence of a Nintendo hardware (which I think is a plausible argument).

Now can you elaborate more? Can you give a convincing argument why total sales for a Mario or Zelda game will be less if it was sold under 3 or 2 consoles, as opposed to 1? Less enthusiasm/brand awareness? Mismatch between the segment that own a PlayStation/XBox and the segment that buy Mario/Zelda (that is, without a Nintendo console, parents won't buy their young children a console and old school Nintendo fans will refuse to buy a Nintendo game that goes 3'rd party?)

Pacther's saying that Nintendo will basically be able to sell to triple the number of people they could sell (assuming that the WiiU, PS4, and 720 have equal sales) if they were first party.

You're arguing a combination of lower margins (due to royalties) and/or lower sales volume. And honestly, it doesn't sound that convincing. Will Nintendo fans really get that upset and refuse to buy a Zelda game that goes to the PlayStation or Xbox (so much for loyalty)? Will PlayStation and XBox owners not buy a Zelda game? Maybe you could argue that not many Xbox owners will buy a non-shooter game, but again, Pachter is saying that Nintendo will be selling X number of games to Xbox owners ON TOP of the number of games they would sell to WiiU.

Again, Pachter's logic is basically you will sell roughly 3 times the number of games by you would sell by going multiplatform, as opposed to exclusive. You obviously need to adjust it here and there (not all three consoles will have equal market share, less potential buzz for non-exclusives, segment mismatch), but the logic is simple and sound.

You're going to have show that the increase in game sales will actually have to be NEGATIVE. That Nintendo going 3'rd party will actually result in their games selling LESS than if they were first party.

Talking about initial numbers, not right now.

Your "backing" (all of you) consists of a fundamental misunderstanding of why people do or don't buy Nintendo consoles.

You're right, I didn't think of the Virtual Console. I never actually used it on the Wii so I'm not really sure how big it is. Is it the equivalent of the stores on PS360? I would think that the biggest factor by far will be the AAA titles you mention.

It'll be all about exclusive hits for Nintendo. I think they honestly thought they could get the 3rd parties onboard and exploit the long life of the current HD consoles, but the plan has failed and sales are horrible(mainly due to bad marketing and lack of a system seller, imo), and now they are facing another round of exclusion much sooner than I think they had expected. They need to secure games that can sell in the double digit millions, and they need to do it by publishing themself. Otherwise, I think it might sell even worse than the GC did.

Source?

Fair enough, I didn't watch the video and thought the argument that Nintendo is doing bad, not that "Nintendo is doing fine but could do better by abandoning the console hardware market". 

1.  I don't know the data on how profitable Nintendo is on their consoles.  However, I do have a couple things to say on that subject.  Firstly, I had to stop the video when Pachter said that the WiiU is barely making a profit now per console, as opposed to "$100+" for the Wii at launch.  I think that is a hilarious criticism, not only because I find it hard to believe the Wii was that profitable at launch (though again I have no data) but because the fact that it is profitable at all is a much better situation than the two competitors' consoles were last gen, and I'd be very surprised if they did better than Nintendo is now with their upcoming consoles, and not at all surprised if they did worse (with respect to profit/loss per unit).  Secondly, I would point out that Nintendo also makes money on controllers and other peripherals which they would not, or to greatly lesser extent, were they to cease manufacturing consoles. 

2.  I think Nintendo benefits strategically from being in the position of dictating their own hardware abilities, like motion sensing on the Wii, or dual screens or a touchscreen on the DS, which would be basically impossible for a software developer to do.  The most they could possibly hope to achieve in that case would be via peripherals like the Wii Balance Board that Wii Fit uses, which was successful but nothing like the same scale.  They probably wouldn't be able to require players to get one for all their games and there would also probably be hardware limitations on the console end of what functionality would even be possible in a peripheral. 

Antoher aspect is that Nintendo obviously doesn't have to pay royalties to other companies while putting software on its own console, which they would have to do if they "pulled a Sega".  So I think that Nintendo may derive tangible advantage, and definitely derives intangible advantage, by maintaining itself as a console maker. 

The counterargument would be that being a console maker means they are effectively prevented from releasing major multiplatform games, because doing so would undermine their own console's software advantage (losing exclusives), and that this restriction loses them SO much market opportunity that it overwhelms any advantage they obtain by the ability to define their own hardware, get royalites, etc.  But I would argue that as the generation goes on, the amount of flagship Nintendo games becomes so great on the Nintendo console that a lot of the audience for their games might pick up the Nintendo console anyway.  But I may here be greatly overestimating the amount of multiplatform ownership.  Even if that reason isn't borne up by the evidence, I still think the benefits for Nintendo outweigh the drawbacks. 

3.  As I described in point 2, I think Nintendo draws great strategic benefit from being able to dictate the hardware on which they make games in order to be able to follow its vision on what kind of games it wants to be able to make (which depends to an extent on the hardware it is able to use to play those games on), which is an advantage it can obviously only maintain by continuing to make their own consoles. 

Nintendo's NES had the D-pad, which was univerally accepted; Nintendo's SNES included shoulder pads which were univerally accepted; Nintendo's N64 pioneered analog sticks and "rumble", both of which Sony quickly copied, etc.  You can argue that the advantage gained was fleeting because the competition was able to copy these developments, but the fact remains that if Nintendo hadn't done it first it might just not have been done, which would limit the games Nintendo could make.  At the risk of repeating myself, by remaining in a position to dictate hardware Nintendo will retain the ability to innovate in its games by innovating in player interaction. 

Honestly I really don't even care if the Wii U sells only 35-40 million units versus the 100 million the Wii sold.

That extra userbase on the Wii was largely driven by people only interested in Wii Sports/Fit/Carnival Games/Just Dance type stuff and maybe a little bit of Mario Kart/2D Mario. As a result the Wii library was flooded with a bunch of casualware crap and the third party support was never that great.

I hope they don't come back to be honest, so Nintendo can just focus on core gamers and maybe even try making new core IP instead of chasing the next silly non-gaming fad. Let that be the domain of the $1 iOS app, because it seems like casuals found their ideal stomping ground with cheap/free software to occupy their 10-15 minutes/every other day urge to play something.

PS3/360 ports maybe not be anything to go crazy over, but I'll take Need for Speed U and Arkham City for the time being over Red Steel 1 and Soul Calibur Legends.

Having to basically support the Wii U on their own will force Nintendo to seek out more developer alliances (ala Platinum Games) and/or expand their own internal resources like the N64 era, so I'm fine with that.

I think in a lot of ways, Wii U will just be a transitionary piece of hardware until Nintendo can release a real tablet platform that's a portable/home use hybrid. 

So you think they will end up unifying their home and portable consoles?  A "WiiDS", so to speak? 

Greenhill's MULTI IDE will stop that from being an issue. And all 3 consoles will have a similar architecture this gen passing floating point work to the GPU rather than the CPU. Developers are going to find it a great deal easier porting between the Wii U/PS4/720 than they are at the moment between the Wii U/PS3/360.

The Wii U won't have any problems getting ports of popular franchises this gen, albeit with a graphical downgrade - and the average man on the street probably won't be able to tell the difference between versions without seeing a side by side comparison. Think PC Medium settings vs Very High settings.