Look at PS4/X1 development, both systems are 1 1/2 years old now, and no one has even delivered a single "made from the ground up" killer app for it. Everything is getting delayed. And the game development on it is extremely expensive. 

Tell me how a proposition like this really makes any sense for Nintendo? They will likely suffer huge delays with software having just gotten the grips of PS3/360 level development, get little/no third party support (same thing that happened with Wii U ... why develop for Wii U when PS3/360 have much large instal base), etc. etc.

I just don't see it. Nintendo is not going to risk losing millions of dollars so that the 10-15 million people in the world who really want a "Nintendo PS4" 4-5 years after the PS4 has been out can have their itch scratched. 

It's a dead end for Nintendo. I mean I would buy it, probably you would too, but you have to understand this is an extremely small audience that you're talking about. 

yer but has Nintendo ever been this forward thinking? All their games still don't have Anti Aliasiing lol so many jaggies. Automatic scalable grafix settings may be too much for them.

Scalable resolution (say 540-720p for the handheld + 1080P for the home TV version) and a few extra effects I imagine they could do without much fuss. 

The N64 RAM pak sorta did this already. 

It's probably a hell of a lot cheaper/easier to do this than make say two entirely seperate versions of Smash Brothers for the Wii U and 3DS for instance. 

Probably will also be very appealling to third parties ... support Nintendo now doesn't have to mean "well can you make us a handheld game? Good, now please make games for our console even though it has a very small userbase too please" ... third parties can just make one basic version, scale it up and down fairly easily and check off the "Nintendo" box on their to do list without the fuss of today. 

As a Nintnedo gamer first I agree with you to a degree. The problem I see if they don't make a powerful machine it will get messacared by the media. The Wii U was massaccared by the same media outlets that praised the Wii (not refering to gaming sites which hated on the Wii but major news outlets).

This will further isolate 3rd party studios. However I think this is already a lost cause.

What you propose is fine as long as Nintendo is prepared to expand its studio relations and even create more internal ones where they create more games on their own. They will need to get to a point where they releasing a game a month with their own publishing. Nintendo need to get into a position where they have a variety of genres that caters to peoples needs (i.e. real sports games, racing games, they usual 1st party games, a fighting game that isn't smash also less mario in other small games).

Actually I wouldn't be that shocked if a Fusion platform actually ended up getting better third party support than Nintendo has had since at least the GameCube era, maybe even the SNES era. 

Lets look at the value proposition here to third parties:

For one cost (relatively low compared to full blown PS4/PS5 development) they can make one version of a game that works basically on all Nintendo hardware.

In the past, Nintendo's handhelds had the userbase third parties liked, but the hardware was so outdated/behind that they could maybe only port games from 2 generations past onto it. That was the issue with GTA on DS, Rockstar was willing to try right? But the type of GTA experience possible on the DS was so far behind the console versions that it didn't have huge appeal to the GTA audience. The Nintendo consoles like GameCube or Wii U have more modern chipsets but they have sh*t for install base so third parties don't win there either. 

But a Fusion platform could bridge the gap here. If I'm EA, yeah maybe I do now consider a Madden NFL/FIFA. 

As long as the userbase is about 50-60 million-ish (both variants), I could see it getting decent/better support even though it really wouldn't even need it.  

Who knows really too ... mobile/portable chips are starting to getting really powerful.

The Tegra X1 being released in a few months can run the Unreal Engine 4 Elemental Demo that was used to demo the PS4/XBox One:

https://www.youtube.com/watch?v=q0d3rFALqLo

This is a chip that will be used in mini-tablets and phones even. 

The main issue is the memory bandwidth of mobile RAM versus home consoles, but I think Nintendo can get around that with eDRAM, even the 3DS has eDRAM (New 3DS has 10MB, perhaps a Fusion handheld could have 32MB?). 

You could have a handheld even by next year that could run some PS4 ports, scaled down in resolution with some details trimmed ... and then a home Nintendo variant that maybe is 2x-3x that which can run the same port at 1080p at home with more effects. 

Not really......3DS+Wii U sales by the end of this generation will be roughly 80-90 million, unifying both devices could very well see the same results.

I think it's way too soon to make that kind of prediction.

This gen they've sold 60 million consoles. That'll probably get to 90m. I think we'll see a decline next gen to around 60 million combined.

Which would still be plenty to make Nintendo some good money and at least ensure a good sized sales base for all their main IP. 

So long as they don't do something stupid with the hardware design (like bet the farm on an expensive gimmick) that could cause hardware losses. 

A game like DKC: Tropical Freeze which barely hit 1 million on the Wii U, would sell 3-4 million quite easily on a 60 mill userbase IMO. A more niche title like Bayonetta 2, I think you'd see maybe 1.2 million WW instead of 600k WW or whatever. 

It's not ideal, but in world of declining Nintendo hardware sales, a unified platform could actually save Nintendo's bacon because at minimum they should be able to scrounge up enough of a userbase so that things like Mario Kart 9/10, Mario Galaxy 3, Animal Crossing Next, the next Zelda, etc. can have a reasonable userbase to sell to.