I don't think he meant, a 3rd party game selling systems directly. Just having a good quantity of strong 3rd party games to back up the 1st party games to finally draw in the people who have been on the fence about it because, despite the Nintendo console having all the high quality 1st party games, that's ALL they have.
The people who already have a Wii U are people who were going to buy it regardless of whether or not it had 3rd party support, but if it DID, sales would be considerably higher. The Wii U would be on track to outselling the GameCube and potentially the Nintendo 64 if that were case

Think of it like this:
SNES sold 49 million, with a strong lineup of quality 1st party Nintendo games, backed up by healthy 3rd party games, despite SEGA breathing down their necks.
N64 sold 33 million, with AGAIN a strong lineup of quality 1st party games, BUT  weaker supply of 3rd party games, because most of the big ones (Final Fantasy, Street Fighter, Mega Man) went to the PS1.
NGC sold 21 million, with another strong lineup of 1st parties, and slightly more 3rd party support, but still weak compared to the Xbox, and especially the PS2, which got Grand Theft Auto, Final Fantasy, and Kingdom Hearts.

And now the Wii U, currently at 10 million, is on track to being the worst selling Nintendo console ever due to the weakest 3rd party support they have ever received despite another strong output of quality 1st party titles.
3rd parties games may not be an immediate system seller like say, a Batman Arkham Knight bundle, or a Kingdom Hearts 3 bundle (I'd buy a PS4 or Xbox One in a heartbeat if that happened), but they're definitely a lurking variable.

Considering how much trouble they had adapting to the Wii U, jumping into the next generation so soon will leave them foundering once again... unless their next system is similar in architecture and specs to Wii U, in which case nobody would buy it.

Can`t really say I can disagree with any of these, except for the 1st one. With the NX, we won`t know who they are catering to until they reveal that. NX could very well be catering to the group that Sony and MS are competing for, or it could have a clear different group to go after. That one I think it is too soon to say until we know more about NX.

I also don`t think it`s a matter of fear that keeps them from fighting directly with Sony and MS, but a matter that it would be more difficult and take more effort to compete directly with them than to go a different direction from them. It`s a gamble, but when it works, it can work very well, like the Wii showed. With all that said, it would be nice if they followed Sony and MS`s route more than go their own way.

Uhhh, then am I just imagining third party games boosting playstation and xbox sales? You really think third parties wouldn't help Nintendo?

They get more games in the sense that they can diversify and create new IP and a faster rate. For example, instead of making Mario Kart Handheld and 2.5 years later releasing Mario Kart Console like they have for the last 3 generations, they can just make 1 Mario Kart game and support it with DLC while working on a new IP or bring back a dormant IP. This holds true for many of their franchises.

Using higher capacity game carts like 3DS uses would be fine and wouldn't scare away third parties, 3DS has exponentially better 3rd party support than Wii U so that kinda proves ur point wrong.

I don't have any proof but its not it's not hard to understand that Nintendo consoles, just like MS and Sony ones, do need third party support from Western publishers. Nintendo can't rely on Japan only, and for it to attract customers in the west, they need to make their consoles just as powerful as the PS4 and X1, and they need third party games. After that, they can focus on differentiating their console from the other two, but Nintendo exclusives and Japanese games won't be enough for the NX to do well in the west. 

Assuming the unified platform thing is more or less the direction they are going I think the portable NX will do reasonably well (50-60 million LTD), but the home NX will probably be a distant/irrelevant foot note. Unless they luck into a new controller miracle again.

But the multiplats/3rd parties AREN'T there, so those people aren't going to be drawn in to buy it. THAT'S the thing. A great 1st party lineup + good 3rd party support leads to more units sold.
It's one reason why Sony was able to get out of the whole it dug itself in when the PS3 was struggling in its first years against the 360, high quality 1st parties (Uncharted 1-3, LittleBigPlanet, God of War III, Gran Turismo 5) with strong support from 3rd parties (Batman: Arkham Asylum and City, Grand Theft Auto IV and V).
You don't think it would do the exact same thing for Nintendo?

I think yes they are helping, but not as much as their first party did. 

Nintendo's hardware sales live and die on their 1st party support. This has always been the case and I feel people are overestimating the importance 3rd party games have had on Nintendo platforms. Nintendo did a rather pathetic job developing, supporting, and executing the Wii U in almost every aspect, which is why the sales are bad for it.

Nintendo does not need third party support to have a successful system.