You lost me at 65/35 split, never would MS agree to that. Only way it would happen is if MS takes control by buying them out.

I thought the best of the West was Valve.

http://www.eurogamer.net/articles/2014-08-20-game-developers-would-most-like-to-work-for-valve-survey-finds

I've mentioned this Ninty/MS partnership idea on vgc so I def. agree.  If Sony dominates the entire gen, I think  its a real possibility when you consider the reports of execs at MS wanting out of the HW biz.  The question becomes, their level of partnership & how willing  Ninty is to taking on a windows platform, in exchange for the now freed up (large) piece of 3rd party market.

But if everything remains as is, I agree with Pachter that there isn't room for a trad. Ninty home console.  What Ninty could do is marry mobile + home with the "Fusion" idea.  To compensate, the handheld would more powerful than usual Ninty releases, so I can envision a $250 launch with minor loss on hw.  The profits will come from a Ninty subscription service with access to its vast library & Home dock (optional). The dock or "terminal" would merely consist of a power cord, tech. that connects multiple fusions/controllers, hdmi out, cheap cpu/gpu enhancer, and possibly 500 gb  storage for $99.  The combo of the handheld + home dock would be at or slightly above current Wii U level performance.

And who gets the profits?

...exactly.

I fail to see the benefit for Nintendo here...why not just wait for MS to sputter out and stop making consoles? If things don't turn around for the One that's a real possibility.

Nintendo is a strong brand that has just lost focus. All they need to do is make sure they get the next console right (and keep the wiiU steady) and they'll be fine.

Xbox is a weak brand who's only major success game from big mistakes by Sony and focusing on just the US.

MS needs Nintendo way more than Nintendo need them and I think Nintendo knows it.

Fixed that for you. Actually, thinking about it now that would be awesome!

That's wrong tho. MS doesn't need videogames full stop, so if they were to pitter out they could just fesibly completely abandon the market or go third party happily. Not that I think Nintendo needs MS either, an alliance would certainly benefit Nintendo more however.

In fact I'm not really sure what it would offer MS?

Yeah the first thing that popped into my head is being able to play your steam games on a Playstation and vice versa.

Actually let me rephrase, Xbox needs Nintendo way more than Nintendo needs Xbox.

What can Xbox benefit from Nintendo's handheld business? Because MS console business is far more lucrative than Nintendo's right now! (More systems sold, more revenue streams)