Why don't just call the thread "Nintendo should go third party" then?

That's pretty much what you're asking, after agreeing that Sony's IPs would do nothing to help the HDS to sell.

This can work in many ways.

"Microsoft Agrees to Support PS4, Sony Agrees to Support Windows"

"Samsung agrees to Support iDevices, Apple agrees to support Smart TV"

"Facebook agrees to support Google+, Google agrees to support Oculus Rift"

sony doesnt have the ips to sale a handheld... 

and sony isnt realy a sexy partner for a smartphone.

It wouldn't be third party in a traditional sense. 

Nintendo would still be able to make their handhelds and even their own consoles, but seeing as how their future console could likely just be a souped up variant of their handheld, there isn't much conflict of interest between them and Sony. 

Better to have Sony as an ally than an enemy IMO. The war against smart devices is all Nintendo can handle (and then some), having to deal with Sony/MS on the other end is just fighting two wars on two seperate fronts and losing both of them. Close one of those fronts I say. 

Unless Nintendo seriously wants to compete directly with the PS5 (yes, PS5, they've already missed their window to challenge the PS4), which I doubt they may as well make an ally here IMO. 

That would be epic. The ultimate console maker 

Well Nintendo such as hell is never going to partner with foreign, non-Japanese companies like Apple or Samsung, partnering with Sony is an easier play for them to experiment in the phone market if they wish. No one's expecting an iPhone killer, but it'd be worthwhile to dip your toes into the water and see what the conditions are like. 

If you get sell even 6-10 million of those yearly (small potatoes by smartphone standards) it'd be a big win for Nintendo, even though that isn't a lot by smartphone standards, adding 6-10 million shipments to a game handheld is a huge difference. 

It'll never pan out like this ... 

The idea of a "Fusion-esque" like type of platform is a pipe dream since power consumption differences will keep that from happening. A game that runs on the PS5 will not necessarily run on the 3DS's successor due to the fact that it'll be extremely difficult for handheld devices to cope with a physically based shading graphics pipeline ...

Nintendo also needs to be more aggressive with Sony about software support if the Vita is anything to go by ... 

This is not necessarily a win-win scenario. Look at it like this, "Better to serve heaven rather than to reign in hell" ...

(The "heaven" been Sony's consoles and Nintendo's handhelds. The "hell" been Sony's handhelds as well as Nintendo's consoles.)

You can replace Sony with Microsoft, Apple, Samsung, Google and pretty much any major electronics manufacturer and the above is the same.

Why would Nintendo prefer Sony?

What's the point of the Nintendo box if the games are in Sony boxes as well?

If the idea is for Nintendo games to reach as much audience as possible why should Sony be the one to choose?

Why not Microsoft machines as well, Apple's devices, Android Phones, toasters?

If they should chose a company to have as an ally instead of an enemy then Sony would be a rather bad idea, seeing how they're other selling many more devices in much faster rates.

Handheld would be in the range of a PS3-Wii U. 

I never said anything about PS5 games on HDS. Just because they wouldn't be PS4/5 ports doesn't mean you couldn't have GoW, Uncharted, etc. on HDS. They could be original games and/or ports of PS2/3 titles. 

Being cornered and irrelevant in the console market with 15 million Wii Us isn't my idea of "heaven". And "hell" would be if the smartphone erosion of the handheld market doesn't stop and Nintendo is eventually forced to become like Sega ... whoring all their franchises out indiscriminantly to every platform including iOS/Android. 

This move would dramaitically reduce the possibility of such a scenario. 

Re-read the last bit in my post ...

Judging by Sony's "support" of the Vita, this seems horribly unbalanced in Sony's favor, with them receiving far, far more than they'd be giving.