-Welcome to 2013.  Here we play many games online.  If Nintendo doesn't figure this out, they will never get third parties to give a d@mn.

1.  (a)  I don't care about Pachter's degrees, no appeal to authority fallacies from you please, especially when his ACTUAL area of expertise is stock analysis.  And even there his degree of expertise is pretty debatable from what I've heard.  But let me ask it this way:  Pachter is saying that Nintendo was selling a $150-costing console for $250.  That might have been understandable while there were shortages.  They'd just be throwing away money by charging less when they can't sell more units.  But what about later on?  Surely they'd have been able to drop the price more than they exhibited to keep Wii sales high?  Even now the Wii is selling for $130 -- a mere $20 less than its production cost was SEVEN YEARS AGO according to Pachter.  Surely, what with the universal falling cost of manufacture that consoles experience, Nintendo could afford to cut the price farther to prop up flagging sales if Pachter's estimate was true, don't you think?  Or is the Wii unique among consoles in having a rock hard cost of manufacturing that has barely decreased through an entire console generation? 

Perhaps more importantly -- if they really were making $100 per Wii from launch, where the hell do you and Pachter get off saying that Nintendo hardware is unprofitable?  I mean that's an INSANE amount of profit they must have been making!  Shit, they must be refusing to lower the price just because of the scads of money they're raking in just on the boxes themselves! 

(b)  What are you basing that opinion about peripherals on?  Regardless, they will still sell many tens of millions of controllers. 

2.  (a)  It's hard to say how much Nintendo franchises benefit from the hardware control I spoke of.  But I would argue that in the long run, it is more beneficial to keep the franchise strong than to pursue the short term gains of going multiplatform, only to see your franchise suffer and see declining sales because of declining quality, rather than continuing strongly into the future.  In this scenario, in exchange for a smaller market they gain reliable customer support.  Look at Sonic. 

(b)  If I were to speculate, I would say that the difference between having to support a console, but not having to pay royalties and also receiving royalties from third parties (which believe it or not do exist on Nintendo consoles), may or may not be equal to not having to support a console, but having to pay royalties, but having access to a greater market; but that when you take into account not only the hardware factor I refer to elsewhere (and possible franchise degradation if hardware control is lost) but also brand unity/recognition, it is at least equal. 

(c.)  Au contraire, the point of "propping up" a console is discussed in great detail.  You can argue whether it is fully justified given the alternatives, but to claim there's "no point" is just false. 

3.  Aside from the effect it had on existing franchises (and I'd remind you of Super Mario 64 and the analog stick, which acknowledging that there are people like RolStoppable who would argue that that was also detrimental to the franchise), it gives Nintendo opportunities to do NEW things like Wii Sports, WSR, and the Trauma Center series which (as a non-player, I understand) relies on touchscreen or Wii Remote drawing for its gameplay.  Making new franchises as well as continuing old ones is, I'm sure you will agree, essential to the health of a software company. 

1)  You haven't even proven that the Nintendo hardware and hardware-based business is unprofitable.  Aside from that, I will concede that if you are only analyzing the hardware for the hardware's sake, then it isn't relevant to that analysis how much the hardware helps the software. 

2)  On the other hand, I think it's quite a remarkable claim to say that "Dictating hardware-->better software" has no relevance to Nintendo's software business.  I mean frankly that's a completely ridiculous statement.  What I suppose you mean is that the quality argument is trumped by the quantity argument of being able to release across two platforms (not three, unless you forsee a new entrant into the market).  But IMO that is a shortsighted outlook because over time series of inferior quality dwindle and fade away, if not disappear entirely. 

4.  In conclusion, simple logic isn't necessarily correct logic.  And I have better things to do than to do 100% of the factfinding while you don't have the same burden, especially when you (and Pachter) are the ones making the claim in the first place that Nintendo would be smarter to abandon their hardware business.  The burden of proof is on you IMO. 

I'm just going to quote myself from another topic here:

''And then there's one MAJOR dissadvantage from what i fear will become a huge problem for the Wii-U: It's CPU architecture. Both PS4 and the next xbox will use the X86, and so does the PC on wich every game is developed basically. This means that once PS3 en X360 are going to start losing developer support Wii-U will be the only major system using IBM Power-PC architecture. Now tell me, how many developers do you think will bother to invest alot of time and money to port their games to a completely new architecture, having to downscale and reoptimize everything in the process because Wii-U is far less powerfull, just to port that game to one system with a mediocre install base? And also knowing that most of they're previous games didn't sell well on it's predecessors?The Wii-U will(and already is) losing developer support faster than it is gaining any. And looking at it's game release schedule it doesn't have much support to lose anymore.''

So in my opinion there's little hope the Wii-U will ever have a large amount of major games release for it, except for Nintendo's franchises. Now i would consider buying one for those Nintendo titles alone, but only for $100-$150 and as an extra system aside a PS4 or new Xbox.(and only after those titles are released).

Nintendo needs to take a step back from trying to innovate to much on the hardware and controll front and get back at creating great new games. We haven't seen a new big Nintendo franchise/universe in 15 years.

Since not many people noticed the Wii U is a totally new Nintendo console, if I were Nintendo I would prepare a total re-launch this fall to fight the arrival of the next-gen consoles. I would re-brand the console "Nintendo Ultra" redesign it with an internal HDD, optical audio output, 5.1 dolby/DTS support and ethernet, USB 3.0. I would make a serious effort and investment to make the Nintendo Network faster and better in every way. I would also make sure to have a new 3D Mario for the re-launch. The prices would stay the same, $300 and $350, HDD capacity matching the ones offered by the competition. I would phase out Wii U, and re-brand and re-release the existing Wii U library as Nintendo Ultra games. It seems desperate, but I think it's better than cutting the prices. Let's face it, the Wii U has a serious branding and positioning problem, cutting the price won't help it and some new games won't be enough in the long run.

did anything like that drastic ever happen in the video game industry before?