I've been thinking about Nintendo next consoles. The idea of the Fusion, in particular, would solve a lot of problems, such as droughts and dependance of 3rd party. But then one thought came to me. Consoles have their games on CDs, DVDs or Blue Rays, and handhelds have their games on cartriges. How on Earth would the Fusion games be released on retail? A Digital-only console is too dangerous for everyone, but for Nintendo more, having to recover the WiiU sales and the reduction of the handheld market. How would they distribute their games?

Why not just make a powerful handheld you can also play on your tv...?

Handhelds have to be portable, and thus, small. If they had to be conected to the TV, they would recquire ports and adaptors to connect it to the TV, taking too much space on the portable system.

Maybe they could do like what Microsoft does with the XBone. The CD that you buy just installs the game onto the console, so you could play it both on the TV and the Handheld whenever.

Not really. There is such a think as mini-hdmi and the controller can connect through bluetooth (which wouldn't be a problem since the console is connected through an AC adapter most likely.) 

http://www.amazon.com/Tripp-Lite-P570-006-mini-HDMI-Digital/dp/B000TT80DG

By then most people will have televisions that take HDMI and Nintendo can drop its analog and component ports. 

I don't think the next console will be a "fusion" though. 

But that could cause a lot of problems as well. You would esentially have two copies of every game you buy, and nothing could stp you from giving one of those for free to a friend. Maybe a better account system coud prevent that, but that would force everyone to make a Nintendo account.

32 gb SD cards cost already 8€
http://www.computerbase.de/preisvergleich/?cat=sm_sdhc&xf=307_32&sort=p

They could use digital obviously. While it would be more costly, they could also go with 3DS style cards. I think the 3DS ones go up to 8GB, and I'm assuming they could be made for larger formats.

Of course, I don't think that the fusion would be a good move for Nintendo.