The current gen is clearly shaping out poorly for Nintendo.
As far as Sony and MS go, their home consoles this gen have been specifically designed to be profitable from day 1.
Both of them got burned last gen on that, Sony with BluRay costs and MS with RROD.
Nintendo if anything was EVEN MORE conservative in terms of power vs. costs,
with Wii U only using 40-45nm vs. the 28nm process Sony and MS are using, at the cost of power.
Of course, Nintendo blew that cost advantage with an expensive tablet controller that didn't help sales,
and a hardware config/development environment and online problems that alienated developers.
But MS and Sony's consoles are profitable with 1 game sale at launch
That is only on a direct basis, not accounting for R&D, but there is less R&D for this gen, at least for Sony.
(MS supposedly invested lots in Kinect 2)
The size of the gen doesn't really matter per se, they could switch to yearly platform updates
and the size of each gen would obviously drop, but that wouldn't matter if
yearly game sales are good and each gen is profitable.
It's clear that next gen will come faster than it did this time,
but that doesn't seem to reflect any actual problem for Sony and MS.
Nintendo... Nintendo.
The downside for shorter gen seems like it would be for exclusives,
if the install base never gets as large to justify as many awesome exclusives late in the gen. (or vice-versa, if those push out 3rd parties)
Then again, if the follow up gen is largely architecturally compatable, cross-gen exclusives are much easier and viable.
