And how would it make up for the royalty fees it would have to pay to other console manufacturers, the royalty fees lost on sales of third party games (that's the huge one), the profit from controllers and accessories (the other huge one), and the ability to engineer a console and controller that fits its specific vision?

EDIT: Just looked down further and saw that Kim Possible said the exact same thing. This is why I normally read the entire thread before posting.

Comes down to opinion in the end. 

Every single attempt has made them money. I wouldn't call that failing personally.

I'm reminded of people who have a meltdown every time a toilet clogs up. Seriously, Nintendo has repeatedly stressed that the day they leave consoles is the day they leave gaming. And that is impossible. Time to accept reality and realize Nintendo will never, ever go away. Moving on.

I don't think they've actually ever said precisely that. If they can't make consoles, they'd just make handhelds. If they can't make either, they'd simply make games. 

Shareholders would boot Iwata and co. to the curb if they just said "well we refuse to make games if we can't have our own console". 

Just because you lose a console generation, doesn't mean you didn't make money.

The Wii U will be one of the few consoles (maybe first, second or even third) Nintendo has put out in 6 home consoles that failed to make money or gain them a substantial foothold.

Sega had literally four or five before they were forced out. And unlike Sega, Nintendo is still pulling decent money from their handheld device sales and their more popular first party software on both devices. Ultimately, whether Nintendo goes hyrbid like many are expecting, full hand held or tries once more with a home console, it will depend on the company itself and what they can afford.

Probably their best bet if they go for another device might be to go all digital and try to replicate what Apple did with their digital marketplaces and the iTunes/iPod/iPhone with a mix of Steam. In Japan alone, they would still get plenty of support and if the sales are good enough, the Western developers/publishers that currently go out of their way to avoid Nintendo devices would be forced to come along as well.

What are these many failed attempts? NES and Wii were sales phenomenons, SNES sold respectively and edged out the "more hip" genesis, N64 and Gamecube, while huge declines saleswise, still profited. Only the Wii U hasn't profited for Nintendo, and that could have changed lately. 

Hardware is what Nintendo does. It's one sets them apart from a typical game developer. And the console/handheld hybrid, while it could be a good idea in theory, there's no guarentee it will be successful just because their handheld line is. And if it fails, then they're REALLY in trouble, as they will only have one piece of hardware to rely on. Probably best to get their revenue from multiple sources.

I'm pretty confident Nintendo has come to their sense and will get it right next gen. That is, go back to the NES/Wii formula of appealing to a mass audience, that brought them such success. If they don't, I do think their "quality of life" platform could at least be enough of a hit to keep them afloat on the hardware front.

100 million consoles sold = huge success. So, the Wii was a hit. The wiiU is not selling, yes, but it is not over.

All of Nintendo's consoles try to aim at the "mass audience". The general family audience, fun for little 9-year-old Timmy, but his mom, dad, and even sister can play. That's the Nintendo vision for every console they make (I'd say probably an outdated and misguided one, but alas). 

The Wii just rode the success of the motion gaming fad for a few years before it fizzled out. 

If you mean make another platform aimed at soccer moms and teenage girls ... sure ... just be ready to charge 99 cents a game. Because that audience ain't interested otherwise and to think that Apple/Android haven't had a major impact with these demographics is beyond naive. 

To be honest I don't think women are interested in any type of Nintendo hardware anymore. A smartphone keeps them connected to their social circle constantly, surfs the web, Instagrams, Facebooks, has Twitter, Tinder, and bazillion other apps and tons of "friendly looking" free or cheap games like Angry Birds, Candy Crush, and even Flappy Bird with easy to play button-free interfaces. Not only that but having a new iPhone is as much of a fashion accessorie as it is an electronic gizmo, a 3DS is a child's toy by comparision.

Nintendo can't compete with that, not in functionality, not on price ($40 games vs. free/99 cent ones), and not in style/marketing (not even close).