If we take a look at the last gen Nintendo sold ~388M home console games. If this is approximatedly true:

Then Nintendo needs to sell (27+7)*388M/27=488M, around 100M games more, something I don't think it's feasible. To put things in perspective, that's approximatedly the amount of games Square Enix or Ubisoft have sold on the HD consoles this gen.

And that is without the money Nintendo makes from the sales of third party games on its platforms.

Why exactly would they need to have a publisher?

I did a quick analysis and here's what I got:

So yeah, let's get down to the publisher thing since it makes a big deal. Why exactly would Nintendo need a publisher? I'm assuming you mean Nintendo approaching a company like Activision, EA, or maybe one of the Big 3.

Edit: Google Docs 

https://docs.google.com/spreadsheet/ccc?key=0Akier6EZHQH1dDJ5UTgxamJQbnZzeXVPRTZqTGE1d3c&usp=sharing

In my numbers I didn't remove the money the publisher gets, but the platform royalties.

"Returns." is the cost associated with returning unsold inventory (sales that don't meet expectations, basically), so it isn't a profit.

If you remove that then Nintendo needs to sell 1.26x (rounded up) more to break even.

1.26x388M = ~489M.

And again, that's without the money Nintendo makes from the sales of third party games.

So you don't think Nintendo would be able to sell 20% more for each game if it doubled its consumer base? Also, do you think that the same demand for Nintendo products exist even now (e.g. Wii Fit)?

Yeah, I want exclusives more than multiplats, so I'm fine. MH3U is a great example. Amazing game so far.

Nintendo had a iron grip on third parties whether they liked it or not during the NES/SNES days forcing Sega to resort to using celebrities for their games and more. Also Sega was considered the "cool console" because it had the more mature titles and arcade style hits which were so big in the 90's but Nintendo still had the top notch third party and the great first party with the numerous faces everyone knows. Third parties were definitely looking for a way out from Nintendo and Sony gave it to them what Sega failed to accomplish in increasing marketshare. 

Nintendo seems to have trouble working out their own ideas and making things right to work in tandem with third party devs. I think its best the way they are going with the Wii U.

Of course I'm angry with Nintendo. 2 1st party software at launch. Whoopdeedoo.

Where's Pikmin 3?

I don't think Nintendo games will sell 25% more on Microsoft+Sony consoles. First of all because I don't think Nintendo games will boost their combined userbase past 200M (double Nintendo's userbase) if their consoles launch at $400+. Probably only the biggest Nintendo fans (~those who bought a Gamecube) will buy one. And if we look at the sales of "traditional" Nintendo games like Mario Kart we see that those games did way better on the Wii due to their broad appeal, some of those who bought Wii Fit or Wii Party bought 2D Mario as well.

There's still a market for non-traditional games, but not at any price. For people that isn't interested in tech is hard to justify the purchase of an expensive piece of hardware that doesn't seem to improve the games they want to play in a noticeable way. Just Dance keeps selling on a dead platform (if Ubisoft keeps milking it at the current rate it won't last too long, though), Animal Crossing is twelve years old and it has never been this strong, and Kinect games keep selling.

Microsoft and Sony believe that the demand for this games still exists as well, otherwise they wouldn't force-bundle Kinect 2 and those cameras the PS4 will come with.

after the crash in early 80's they created new era centered in Japan it was Japanese industry that became mainstream and it was so until Sony launched PS2

in Japan they created some powerful enemies as was Namco and others they became too powerful and most industry lived under their shadows, they saw Sony as salvation of some kind, the CD case was only excuse, it was not moneyhat.

similar in the west the western 3rd parties saw Nintendo as too successful to deal with they send Atari and most western console makers to obscurity, Nintendo invented harsh but necessary system to prevent another crash, the 3rd parties lived literary under the feet of Japanese giant.

They never liked Sega but they saw them as some chance to erode Nintendo domination it was western branch of Sega that invented harsh marketing campaign against Nintendo.

The methodology invented in 16-bit clash is successfully exploited to this day, today their ads appears as laughable but as highly tweaked it works to this day and in fact this became backbone of the entire industry.

The hidden hate against Nintendo is in fact fear, they fear them, because they know Nintendo is the only company in entire market they can't control, they literary control Microsoft and Sony, but not so much Nintendo.

In the end it is not western developers who are to be blamed but Japanese developers especially Capcom, SQUARE and Enix