Well I don't really see the next-gen devices being a huge leap over Wii U so I don't think we will be seeing 40gb+ games. Most Wii U 1st/2nd party games are under 8gb with many of those being under 4gb. To my knowledge, Xenoblade X is the only one over 16gb. Currently 3DS has cartridges that range from 1gb-8gb so next-gen we could see most cartridges ranging from 4-16gb and the rare 32gb cartridge.

As for price perhaps we will see a middle ground between handheld and console games with a $50 price tag for the high end of the spectrum. Smaller budget retail titles can still be in the $30-40 range and the sub-$20 eShop titles.

HARDWARE: I just don't see it not being either too weak or too expensive. Hell, i can see it being both things at the same time. Just picture a "Fusion example" made of Wii U + 3DS, it would sell for $500 while being weaker than PS4/XOne. Yea, yea, i know both of those are priced with profit, but still, selling at zero/loss would be a big con on its own.

Also, how would a HH share the same games that a home console? It would need the same specs, or pretty close to emulate something close.

Or it would be done by cloud/stream? This would be just crazy. One of Nintendo main weakness is their online (not the stability. but the structure/design). And betting on online is a big gamble itself, most countrys don't have the infrastructure of USA, Japan, Europe. It would alienate too many people.

SOFTWARE: I too would love getting twice as many Nintendo games every year (which i already do, since i own both U+3DS), but there is a lot of risk here too.

Even in Wii U, the main problem is the absence of third party, not first party. This Fusion line of thought is people wanting Nintendo to go full solo, and that's just not the answer, nor it is good for the players. Even if you don't care about CoD/Fifa/AC yearly cash grabs, there are many third party that deserve to be played.

If a game MUST be playable on both HH and consoles, developers would just ignore the damn thing. It they don't have to develop it for both formats, than many gamers would just see an expensive machine with some gimmick that most games don't use. Anyway you look to it, it loses competitivity.

I am all in favor of connections that bring together both systems (like MH3, Smash, Amiibo), and even streaming capabilities like the VITA but with the GamePad technology (it is so much better), so Nintendo can stop selling the GamePad bundled and cut the price. But this "Fusion" things just seems impractical, and i only scratched the problems.

Haven't read everyone's response so may I repeat someone's points earlier. Anyway:

Pros: More software on one device besides less software for two devices

Cons: Software like Mario Kart and New Super Mario Bros. gain a lot of sales for releasing in two different types of consoles. Unless Nintendo release more than one Mario Kart/New Super Mario Bros. per that generation, Nintendo needs to make sure those games sell as much as two versions.

Pros: Some games may be cheaper because most software should be able to run on the handheld version.

Cons: Pricing on games. How will Nintendo decide how much will a game cost? Do all games cost 60$ because they can run in a higher resolution on the home console model or will all games cost like a handheld game ($40) because most can be played on those?

Cons: Marketing their games: How will Nintendo market games that are made for handheld in mind? And will the consumer and gamers see games marketed and priced like handheld as lower budget titles? This is a possible concern now because all titles should be compatible in all Nintendo fusion models. Smart device games don't suffer from this because they have very few games that take advantage of the tablet screen resolution or specs.

Pros: Nintendo is less likely to be stuck with a home console with lows sales. Currently the Wii U and 3DS have different specs but the fusion model should have the two with very similar ones. If the home console version has low sales, they can still produce titles on it because consumers can buy and play them on the more successful handheld version.  

Cons: Fusion represents a going all in mentality. If the fusion model OS or core specs doesn't resonate well with the market, all version can face disastrous sales and Nintendo won't have another handheld gaming device to back them up.

They have sold 60 million devices (hh and hc), a big failure after the 250 million last gen.

If they can catch at least 80-100M with Fusion that could be a big success compared to this gen. Also, costs of the unified library won't be as big as the one currently.

OT:

PROS:

1. Better library: Only one iteration on big franchises like MK and SSB will free the team for another tasks:

a) Games with better content/value at release date as they won't develop 2 versions

b) Good planned DLC

c) New/Revival old IP's

2. Sharing the same or almost same library will let people decide where to play the games, on the go, on the home, or both.

3. Sales can go up as consumers won't have to choose between both devices with different library. They can choose only one and be exposed to the entire library. That will also free resources and consumers can buy more software.

4. Software can be easier (faster, efficient) to develop.

Pro's: Easier for them to make games. Potentially fix their look with people.

Con's: People will buy one. Less money for Nintendo. Since one person doesn't need to own two Nintendo products anymore. I'll buy Pokemon on the console only. Trading/battling is than perminalty restricted to online.

Less people will be around with a handheld. Streetpass can become pointless.

If it fails. No handheld backup money. Only mobile stuff is their backup.

Can't build cheaper games. If console power takes priority.

Control issues. Does the sytem suport the gamepad/wii remotes. Or the 3DS layout? Or the game has to have 5+ control scemes to support. What about AR card ussage?

Longer time to make all games. Consoles quailty has to take priorty. No lower res stuff could be used.

Pros: It will have Nintendo's quality IP.
Cons: It will only have Nintendo's quality IP.

Also QoL, Park attractions (Universal) and most likely the rumored series of their IP's like Zelda.

Pros: Everything.

Cons: It's not out yet.

That's still seprate entities. It be like saying the PS brand can support the TV devision. Or by this logic. The Wii U isn't doing bad. Or Nintendo didn't take a loss on 3DS early price.

pros:

more game output
just need 1 device for all nintendo games


cons:
Power will probl be hold back by arm chips (wont expect anything more powerfull then wii u in the next year)