So why is Nintendo making more money than Sony? Is it magic?

Their games need more violence, boobs, butts, and foul language to prove they can be more mature (because that's what counts as mature).

1-Absorb some third party devs.
2-Make some good western style games
3-Be hounded due to anti-Nintendo hate

2a-make generic shooters en mass.
3b-Be hounded due to anti-Nintendo hate
4-Profit

EDIT: Ooops, forgot

Make the shooter have massive online modes.

I don't really think it has much to do with the fact the Nintendo simply doesn't appeal to westerners. 3DS has sold about 25 million in the west and Wii U about 5 million for a total of 30 million in western markets this generation and I'm gonna predict 50+ million lifetime.

The problem isn't that westerners simply don't like Nintendo or their games, the problem lies elsewhere. On the handheld front Nintendo now has to compete with smart devices that offer $1 or free games and on the console front they have a relatively expensive console for what it offers (low software output/weaker specs/less multimedia features).

I think Nintendo should focus on unifying the handheld and console fronts and offer low cost hardware/software with strong software support. Maybe they won't outsell the competitors but in this scenario they will have a large enough user base to sell their ip to and make profits.

It's because sony is hemorrhaging money in many of its other deapartments.  The playstation brand is one of its more stable investments.

As far as the marvel stuff goes, I really doubt nintendo would be willing to shell out the money it would take to acquire the licenses.

You're not getting my point, which is why I have to keep saying it in a tireless fashion. AAA devs stated from 2011 that they wanted specific hardware within a certain range and some even collaborated with Microsoft and Sony. Cliff Bleszinski of Epic anc, Yves of Ubisoft as well as others had stated that 8GB plus other spec needed to be updated. When Nintendo launched the WIi U some devs decided to give Nintendo a helping hand with third party throughout the end of last gen, but that was it. Nintendo probably wanted them to continue to support the Wii U but the install bases purchasing habits were not giving them any reason to downport their games. Perhaps if Nintendo wasn't notoriously known for the past twenty years as being the only console that wasn't third party friendly and gamers still had the same vigor to buy third party on it (like the 90's) there wouldn't have been an issue. You're weighing lack of interest with no longer being a merket leader and the console power being deathly low by next gen standards. As you can see third party devs have only begun to start to focus on next gen while giving last gen a bit of a wink and a nod, but Nintendo served themselves by not being the only console manufacturer not to listen the advice of third party. It wasnt until E3 2012 that Nintendo decided to finally listen to them and still managed to lose contracts with EA through disputes. In the end its a couple of things, but what I am saying meets the criteria of the OP's post, which is that third party accounts for about 60%-70% of a consoles lifetime sales. 

As we speak, Nintendo is hard at work on their next console because they knew this one was a screw up (as has been reported). I'm sure they will be open minded enough to let third parties in on it now. If they don't they are screwed next gen as well, because they won't even know what Sony and MS will have up their sleeves come 2018. The sweetspot number for Nintendo is six when it comes to console life. 

Before they even demanded 8GB of ram we had Cliffy B demanding newer consoles and considering in 2011 that they had been pushing as much as they could out of the last gen Playstation and XBox. Yves of Ubisoft first brought up next gen for me when he started talking about the fact that next gen will need a graphics overhaul but AI will have to get smarter and they need more powerful consoles to do it. These companies had a vision years ahead of next gen and Nintendo still found a reason not to listen. All Nintendo pretty much got to say at the end of it all was that in 2012 they had the prettiest version of COD and the online still wasnt on par with last gen either.

http://www.xbitlabs.com/news/multimedia/display/20110920204349_Game_Developer_We_Can_Squeeze_More_Power_from_Xbox_360_But_Next_Gen_is_Imminent.html

http://www.vg247.com/2011/07/06/ubisoft-strength-of-next-gen-systems-will-be-in-ai-not-graphics/

Nintendo makes more money than Sony because the other failing branches of Sony hurt their profits in the gaming realm. Sonys only baggage in the gaming realm is the PSV.

Tomodachi Life succeeded in the same way, too.

This, if Nintendo wants to be mainstream as MS or Sony, they need the support of key western third parties.

The problem is, the price for persuing such support, might ruin the company in the long run.

So their best option, the option you see them implementing, is re-structuring their company to streamline

their business and game-development, fatten their exclusive library with third-parties on game genres their

first party studios are not making.  

That said, there is one area where they are really suffering:   Sports Sim titles.

EA has a lock on many major sports liscences.  Nintendo might need to develop a studio, or work with SEGA, to compete with EA on that front.

Nintendo should have started by making Project Cars an exclusive title.  

I think Nintendo made more profit than Sony's gaming division (220 vs 200).  So not including Sony's other branches.

Sony might be selling more consoles, but Nintendo sells more first party games.