They are doing OK right now in terms of net income because the yen is weak, but if the yen were to go the other way, they would very quickly go back to earning a loss with their current sales/operating profit.

So you don't want to allow your sales revenue and operating profit dip so low that its at the mercy of currency fluctuations.

It isn't quite as simple as saying "well they just need to profit" ... making a profit is not always so straight forward. 

This. Going for a goal of 20m consoles per generation or so would mean taking a lot of risk for a small profit, it means limiting potetial sales of software it means not being able to react if a new competitor erodes a relevant marketshare (like tablet did to DS). At that point it would really be wiser going 3rd party.

Oops. Only home consoles. My bad. 

I'm really not sure why this "Nintendo/Relevant" topic keeps popping up. I'm pretty sure that if they were in kind of real danger of becoming irrelevant, they wouldn't be such a hot topic in the first place. Nor would their games, in general, the big franchises, still sell well, nor would the 3DS, in spite of not doing "DS numbers", still be selling really well. Etc. etc. etc.

So long as video gaming itself exists, I have a hard time imagining Nintendo NOT being relevant.

If Nintendo can sell 60 million units of hardware when underperforming (gen isnt over yet ), then i guess you can call that pretty relevant.

Nintendo doesn't spend nearly as much as the other two on massive development teams, buying expensive 3rd party exclusives, maintaining high quality internet, or on marketing so honestlly they don't need to sell nearly as much as the other two in order to profit the same amount. They are conservative with money spending, making it a lot easier to turn profit.

If you can make a profit you can be in business forever

I can't believe people would be play with future Nintendo consoles to sell under 20 million units. At that point its not even competing its just slogging through

If fusion is a thing, I'd say 15mil. But even if it fails badly and they go 3rd party, if they are able to profit from selling hardware and having their games ported to it, they'd still be in hardware business. They could always ship their systems with other OSes like Android, Linux or Windows as well, some people would surely buy it.

That's what I mean in the op, the number of hardware/software sold isn't necessarily the problem, it's that they have been selling hardware at a loss for over 3 years now, if 3DS & Wii U were sold at a loss at any point in their lives than their profits would be pretty good.