Buying big 3rd party developers decreases the value of those companies the moment you buy them. This because they can't divest their risks any more, but are bound to one/two platforms. Sega's only success lately is been on Nintendo platforms, so that could be a good candidate for take over, but the IP's aren't that strong anymore.
Remember that you never really own the people, cause they can leave, so the IP's of the company should warrant the investment.

Square and Capcom are probably way too expensive to be bought by any company. Level 5 might be a nice one.

develop a hard drive i need one badly i have way to many vc games

Nintendo makes more money on their consoles than the other companies (MS and Sony). The Wii is a cheap console to produce and it sells extremely well. The omission of HD gaming and focusing on the interactive gaming experience with the Wii remote has resulted in a huge success. Nintendo has bounced back to be number one in console sales and leads the current generation comprehensively.

Make Nintendo Mexico.

They're never gonna buy another developer. It's just not their way. They might pick up a smaller one. They should expand their 1st and 2nd party teams. More games! :p

invest into head tracking, and for the next machine get some torque under the hood for better graphics..... thats pretty much it... and get some good IP's (but im a big believer of "quality over quantity")

They should do R&D on an actual, online platform. A la home, or XBL

In an even remote possibility Nintendo bought Square Enix, they'd have already won the console war.

put it towards their next console where they can give gamers more bang for their buck.

ie- have system production costs $50-100 more then the price to purchase a system. they don't need to go crazy like sony who was selling a $840 system for $600, but it was a good deal compared to the wii which took somewhere along the lines of $250 to produce.

 Well they bought Monolith...