Well there are a couple of billion dollars in the console industry. This time it is too late to outsell Sony - If MS ad taken some loss at launch they could have killed PS4. Nintendo could stay as their non-monopoly alibi.

The problem isn't MS' tactics, it's just that they take up too much space in the industry which doesn't allow Nintendo to have very many options. Two's company, three's a crowd.

If there was no MS (and lets be honest, MS doesn't need the game industry), Nintendo could make a comfortable living as the no.2 console maker, probably selling 45-55 million consoles a gen without too much fuss.

But because you have both Sony and MS, it forces Nintendo to have to go to all sorts of weird extremes, like trying to make games for soccer moms/women, who then get tired of said game and will never be interested in Metroid or Zelda or Kid Icarus or anything more difficult than a 2D Mario or maybe a Mario Kart game.

So that's a problem, they get backed into a corner.

In some ways, Nintendo's best bet might have been to have Sony just KO the XBox so badly that MS doesn't want to ever come back to the business as a hardware maker.

Of course Nintendo can and should compete in the traditional console space. Skipping that area with Wii made sense because both HD systems produced tremendous losses in the early years. The 8th Gen Systems, however, are far more viable and more in line with traditional system costs. If Nintendo had scrapped the valueless Gamepad screen they could have easily made a system in the same ballpark as their peers. If they implemented an annual fee for online and unlimited access to their classic library, they could turn a handsome profit, too.

Nintendo can't afford to compete with hardcore consoles

They could have beat Microsoft this gen with a similarily speced console and wise use of a year long headstart. 

Besides Nintendo made far more money than MS + Sony combined last generation, in fact I'm pretty sure they made more money last generation than MS + Sony combined in all their years in the business. 

No console can survive without third party support

That statement needs to be more precise: when you mean survive, you mean in terms of sales or in profitability? Because Nintendo has managed to make a profit on consoles that had very poor 3rd party support.

Nintendo doesnt have more money than sony despite what nintendo fans keep saying. Sony as whole is larger, for them devoloping a console and marketing will always be cheaper than for nintendo.

whats hilarious is you talk of how the Gamecube flopped yet Nintendo made wayyyyyyyy more money in the Gamecube/GBA era than Sony did from the PS2 (i.e. the best ever selling system)

I just think that indicates how it is not always relevant who is selling the most in terms of quantity, sometimes it is completely irrelevant. Nintendo will be less concerned with being the top video game seller than keeping costs low and maintaining sales to a certain degree- the real question is what numbers they need to maintain their success

   granted obviously the last year or 2 have been tough compared with the past. Nintendo will be fine, they are not a company who likes to spend much money but if it comes down to that they can do whatever the want in terms of developing a console for multiple generations. they are bound to find the right balance. the Wii U is their first true failure in quite a while and in its same generation they have a quite successful handheld so it's not so bad

Nintendo actually has way more money than Sony. Sony is a larger company but they have a lot of a debt and have very limited cash reserves. in terms of assets and cash on hand Nintendo is in  a way better spot that Sony, despite the recent success of the PS4