Yup this is a real possibility. There have been rumors that Microsoft investors want Xbox gone, and Nintendo needs to expand their audience. Microsoft is also taking more distance from the Xbox brand recently with Windows 10. So Nintendo could be set on buying the Xbox division.
Or what if Nintendo would work together with Microsoft, instead of buying the Xbox division? Combining these two brands would definitely give Sony Playstation a run for it's money.
They could just release a new(mobile) system together. A shared system would give Nintendo a much larger install base for their games, and still remain a hardware manufacturer. Besides this way they could get royalties of third party game sales they would never get on a Nintendo only system. For Microsoft having Nintendo's vast IP library exclusive on their system would give them a huge edge on Sony. Also it could give them a way to gain a stronger presence on the mobile/handheld market. It would even allow for descent sales in markets like Japan.
