I'm not sure that's entirely true. I remember hearing a little while back that Miyamoto wanted to make a FPS after he completed Zelda U. A FPS by his team would be very interesting.

He's said several times though his ideas for an FPS don't really have to do with guns and gore. I'm guesssing he'd make somwething more along the lines of Portal.

Why take studios away from what they want to do or are good at?

Look at Microsoft. They're building studios by hiring some of the best in the industry. They wanted a team that could create Halo-type games, so they built one. Nintendo doesn't have Microsoft's resources but they have tons of money. They SHOULD have the capacity to build an elite studio in the west. It's simply a matter of being willing to invest.

 Fair enough, even though that would still technically be an FPS.

OT: Have people completely forgotten about that game Conduit? I remember that was supposed to be the Wii's answer to Killzone and Halo. Honestly, the fact that that game flopped so miserably, and the fact that games like CoD have always sold so terribly on Nintendo platforms kindof says that the Nintendo base isn't really looking for a strong FPS title. Maybe should should just ignore FPS all together and stick to evolving their own titles and make new ones in a different genre. Of course that is excluding Metroid. Another solid Metroid game like Prime would be amazing.

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Nintendo EAD Group No. 3, because they made this:

Rareware, but they were stupid enough to sell their best developer to Microsoft. For this decision alone, Nintendo deserves to be doomed. Retro should better focus on a Skyrim-like 1st person Zelda game, which Myamoto once intended to create.