You only considered revenue and royalty cost. There are so many IMPLICIT costs they'd have to incur if they went third party.

Such as porting? It's already been debunked by Kapi, it's pretty cheap actually.

Or like.... SDKs? Engines? All of those are so (relatively) cheap that they would be non issues for Nintendo.

1. Lesser brand identity. A lot of would-be niche Nintendo games sell well because they are first-party games, and almost guaranteed quality. This wouldn't be a cost if Nintendo could guarantee quality of these games, but there are other things to consider that might affect the quality/quantity of their games, which I will further delineate. 

2. Higher development costs. Nintendo games will compete even more with other third-parties. That means the budgets of said games will have to match their own budgets. Furthermore, Nintendo games would have to take advantage of the hardware in which they are building them for, in other words, the already struggling Nintendo with just Wii U level hardware would have to struggle much greater on PS4/Xbone level hardware. The main reason why Nintendo makes weak platforms isn't the cost of hardware (otherwise they wouldn't make the gamepad) it is the cost of software. They realize that more powerful harware => high software costs if you want to compete with AAA game developers. As it is now, Nintendo games are always noted with, "it looks good - for the wii/wii u." 

3. Not having games tailored to specifically designed hardware. Often (if not always) Nintendo designs their hardware in order to affect their software development. This has been true since the NES. Nintendo as a company would have to functionally rework how they make their games. A clear example of this is point #2, but another example would be control schemes and mechanisms. Such a transition would induce costs, as Nintendo games are usually good because they interact with unique hardware so well. If NIntendo has very little input in the hardware of the platforms it releases games on they need to do more to fit the standards of said platform manufacturers. 

Those are just a few I've thought of on the top of my head. I'm sure if we knew more about the inner-workings of Nintendo we can come up with dozens. The assumption made is that there won't be road-blocks in the transition from first-party publisher to third party publisher, and the argument I'm making is that said assumption can't be made realistically. If said assumption can't be made realistically, then there are implicit costs involved. 

No thanks, I dont want their games turning like Sega. If they are struggling to develop games on their own hardware designed by themselves, they will have one heck of a time developing games on Sony/MS hardware and not to mention PCs... They will most likely turn into Sega which will eventually spell their ultimate doom or lower game quailty. If thats what you people want then great but I for one would love for Nintendo to continue to make great games and if it means that I will have to buy their hardware, so be it.

I know Nintendo isnt doing very great but it is due to their own questionable mistakes which many can be easily undone in their next console if they dont do stupid things. Yes, going third party as the possibility of greater income but that doesn't always mean its a good thing nor does it mean that they will succeed in doing so. Developing for 3 different platforms is something I highly doubt Nintendo can handle without having loss in game quality or receiving significantly longer delays considering how much they struggle with just one

1. Mario is probably the biggest gaming franchise in the world, in terms of recognizability and brand identity. I don't see any good reason as to why Niintendo would lose much, if any, of their brand power by going third party. Why would the quality of Nintendo's games decrease by releasing on other platforms? Sure, the quantity might take a hit in the transitioning phase when they're getting used to it, but once they've gotten used to multiplat developping it should be back to normal.

2. This would only be an issue if Nintendo made it into one. Nintendo could keep one making games with decent graphics and a 60 fps stable framerate, just add Anti-Aliasing and a higher res. Most people wouldn't care, because let's be honest, the art style Nintendo uses the most (call it cartoonish or pixarish or Nintditic, whatever) doesn't require that much graphical oopmh to look good.

3. Heh, I've played a fair bit on my friedns Wii U, and there are very few games there that are tailored to specifically designed hardware (I assume you mean special features, like in this case, the gamepad). Most of the games Nintendo make aren't tailored specifically around those hardare features, more often then not, the hardware features come in as after thoughts in already fully working good games. Nintendo already fit in the standards of the other platform manufacturers.

1. Why did the quality of Sega's game take a hit when they went third party? Because they no longer need to sell consoles with their IP. They only need to sell games. Nintendo could make a number of poor Mario game and they will still sell decently (until the franchise is known for mediocrity.) Did the Sega brand not change drastically? Even if Nintendo could maintain the quality and quantity of releases, there are issues. How exactly do you think games like Animal Crossing would sell on the PS4/XBO? Probably horribly. Why? The audiences on said platforms are just different and have a different conception of the Sony and Microsoft brands. 

2. This is true for some Nintendo games, but not all. Games like Starfox, Metroid, Fatal Frame, Pikmin, Xenoblade, Fire Emblem, The Legend of Zelda, and other more niche titles will need to compete on a graphical level. A cartonish art-direction would make not hitting 1080p 60fps even more unsatisfactory to the PS4/XBO userbases, as such games are not suppose to have demanding assets (in their eyes) but should have desirable image quality. 

3. No I don't mean special features. The NES, SNES, N64, and Gamecube had controllers which Nintendo tailored their games to, and said controller weren't especially special. However, there is more to a platform than controls. Nintendo would be less familiar with the hardware, making it more costly to develop games at the same quality for. Nintendo would not be able interface some special features like handheld/console connectivity (which they have taken advantage of in the past) at anywhere near the same costs. Certain things like amiibos would be more costly, as they need to get the platform manufacturer's okay, which might be an issue if say somebody like Activision asked the manufacturers for special priveleges so that they can remove the Amiibo competition (this happens often enough with third parties.) Pay-gates to online games could affect the sales of games like Mario Kart and SSB, which target audiences who are not willing to go through such paygates. So on and so on. 

Actually it's not far off. A $60 title at best buy goes for $50.20 - $51.60 at employee price. Our price is determined by store cost of product + 5%

so yeah they are making near that but NEVER over $15. This is because the stores make 0 profit on game consoles, which is why they're so adament about getting you to pre-order, or in best buys case, buy product protection plans, memberships, accessories, bundles etc.  So in return for selling the console, the deal is made with the higher ups that retailers get a decent profit from software.

Oddly enough, and this may be for another thread, this is both why digital needs to become the standard and why it never will.

What numbers are in the OP that ends all discussion about whether or not Nintendo should go 3rd party?

LOL this is what sega said to them selfs too and a lot of people agreed at the time, they also had special deals with microsoft and look where they are now and how much games they make.

Nintendo should just charge for online like sony is and the hardware expenses are beyond covered. Nintendo fans should finnally except that their 5 billion $ company cant substain devoloping own hardware and online infastructure without a constant inflow of cash.

"It's also worth thinking about the 2001-2005 era. Even though Nintendo handhelds sold far better, the revenue from home consoles isn't that far behind. At this point you might as well add handhelds to the things that Nintendo should scrap."

Not really, no. As a multiplat publisher for home consoles, Nintendo would have a much bigger userbase to sell to, that wouldn't be the case as a publsiher on home consoles. Besides, I don't mean that Nintendo's home console division is performing badly, (okay currently it is, but that's besides the point) but that it could potentially perform better.

And while I do think that Nintendo would not be able to reach those heights as a 3rd party publisher, I do believe their lows wouldn't be that low and that their normals would be substantially higher. If Nintendo were to invent fairy dust and make a success like the Wii again (and again and again and again), then going third party would (obviously) not benefit them. However I don't think they will.

Nintendo is already spreading out as a part of that strategy, why couldn't they also spread out to multiplat home console titles? It would, in my opinion of course, be a better bet for both direct software profits, but also for seriously expanding their fan base.