It really isn't that difficult to make a competitively-powered console. Nikkom mentioned up there that a $50 Chinese tablet can already (easily) outperform the Vita. And they're making profit on that!

Honestly, I think Nintendo is more afraid of the game dev side of things (time, budget, scale, etc.) than the cost of the actual hardware. Whatever it is, I don't like it.

The N64 didn't get many 3rd party games (compared to the PS1 at least), because it used carts instead of CDs! The GameCube, on the other hand, didn't get many 3rd party games because it used mini CDs and its kiddy image didn't help either!

There is always an excuse.  The 'excuse' now is power, but the real reason is 3rd parties no longer have a userbase on Nintendo consoles to sell their games to.  Of course, that's what happens when you ignore a userbase for decades, they ignore you right back.  I don't see anyway for Nintendo to fix this issue, and I don't think releasing a more powerful 'playstation clone' is really going to make any difference.

That seems very unlikely. For Nintendo to release their console first (which seems likely) and it be equal/stronger than the PS5/XTwo, maintain backwards compatibility and have a cross platform architecture, they will either have to take a massive loss on hardware or price it as a premium product. Both of those would be pretty dumb.

Not to mention it would make porting between their handheld and home console very difficult. I'm personally expecting their next handheld to be between the Vita and PS3 (assuming they want it to be priced well). Porting a game between a 9th gen system and sub-7th gen handheld would be like trying to get inFamous:SS to run on the PSP. Sharing an architecture can only help so much.

I think their best bet would be a slightly sub-7th gen handheld and a X1 level home console. It would allow for a cheap price point, linear graphics scaling would be simple (providing they avoid any advanced 8th gen tech) and it would be a significant jump over their previous consoles. Who knows what they will really do... :p

It is true that nobody can predict the future but one can always look at current trends:

-First party classic Nintendo franchises still sell well

-3DS is still selling well enough considering how huge smart phone gaming has become

-Handheld franchises are still huge for Nintendo (Pokemon, Animal Crossing, Monster Hunter, Nintendogs)

-Third party support for Nintendo handhelds has always been excellent

-Unless Nintendo comes up with something revolutionary they are destined to be third place in the home console market

-Sony has pretty much abandoned the handheld market

All of this indicates that Nintendo is going hybrid: The best (or only) handheld around with the best third party support and beloved exclusive Nintendo franchises, take it with you or play it at home with family and friends in your tv (with some "base" station).

Nintendo is creating a new "niche", they are not getting triple A third party support anyway so they are maximizing their profitable business.

On top of that Nintendo has been heavily hinting at this recently.

ooops, error on my part double post

As an industry insider, I can guarantee that Nintendo is creating a new "emotion" chip.

Hell, I helped in determining the requirements for it and was instrumental in the specification stage.

I seriously don't understand why people want Nintendo to make a console that rivals PS4/XBone in power. The type of games they develop really just don't call for it, and it's pretty much been established that strong third party support will remain nonexistent for them. They should just keep doing what they're doing with Wii-U.

The only way Nintendo could get a console more powerful than Sony's and Microsoft's would be to be the last ones of the 3 to release a console.

I am quite confident in that the new handheld will be backwards compatible with Wii U.