Well if they do decide to unify the handheld and console so that all software is playable on both, then it will get all the 3rd party support that Nintendo handhelds have always been known for, which is hardcore Japanese titles and child-friendly Western titles. At a price of $199 with $30-40 software, Nintendo 1st/2nd parties alongside Hardcore Japanese games+Child friendly western games+increasing indie support+vastly improved Virtual Console gives Nintendo devices a ton of content despite lacking AAA titles. Nintendo's best chance of success next-gen is to completely differentiate themselves from MS/Sony and concentrate on their strengths.

Those prices made me laugh; that proposed price point is 100% impossible.  Th fusion idea isn't Nintendo's best shot for anything but anihilation.

Why? if they go with a modestly more powerful console similar to the leap from GC to Wii, they could most certainly sell it for $199. What do u think is a better scenario?

Handheld will decline. Smartphones are better on this game. The idea of partability is for quick games when you are on the go and most handheld games are terrible for short sessions. Smartphone games are amazing for this. And the market penetrations is increasing and kids will get a phone pretty early and their parents will probabluy prefer to pay for only one device that has the bonus of having cheap/free games.

Home console will be up. Wii U LT sales will be low, it's hard not to improve on that. How much? It will depend on Nintendo. If they are stubborn as usual, not much. If they lear one or two lessons, maybe even a good one.

To be fair, PC market shrinked a lot. It just stopped because it reached the segment where people actually do serious work and need a PC.

So are you basically saying a kids console. how will the nintendo gamers feel who have grown up and want more mature titles. And can you really see them launching at $200?

Handhelds, I reckon, are finished. This next one'll probably be the last one and sell 20-30m less than the 3DS. :(
Home consoles, I don't know. I think they will improve sales, but I don't hope so.

next DS > Wii U

Wii U 2 will sell more, 3DS 2 will sell less.

Are Gameboy/GBA/DS/3DS exclusively kids systems? Because this scenario would feature similar titles that those have always recieved.

I don't think Nintendo is going to make their next console much more powerful than Wii U. The handheld version of these unified devices could be somewhere between Vita & Wii U in terms of power, similar to how 3DS is between PSP & Wii, while the console version would a slight bump over Wii U, similar to the difference between GC & Wii. These devices will have the same architecture, operating system, online infrastructure so that they can share a single library but with the console displaying at a higher resolution with some extra graphical features.

By doing this Nintendo can significantly increase their software output which will allow then to make more new ip at a faster rate, no more droughts due to making software for two completely different devices. This also ensures that the console will get 3rd party support that the handhelds are used to recieving.

So yes I so believe Nintendo can release devices like this in 2016/2017 for $199 each without taking a loss.

I agree. A ps vita was bought for me 2 years ago but I've barely ever used it apart from ps1 classics.  Got an Xperia z3 compact and there are tons of free time waster games on it. Don't really play them myself but my go plays loads. 

Chatting to my god son who used to be addicted to his ds he's telling me about kids in his school getting iPhones or ipads. He's only 7 lol