You guys have got to be kidding right? Their software sales across the board (mainstream+niche) would grow exponentially, software revenue would double at the absolute minimum.
1) NONE of their games would reduce in sales, thats just silly. 99% of what Nintendo produces is at the top of its class in terms of genre and more often then not, there is not strong compition coming from third parties. There are almost no decent budget games on PS4/X1 like Captain Toad, Pikimin, Wonderful 101, Splatoon etc. Beyond that Nintendo's audience wouldn't suddenly vanish if they went third party. Even as things stand, I doubt most people own a Wii U exclusively, meaning that Nintendo's games are already in competition with third parties and even if you did only have a Wii U, that means you obviously want Nintendo's games above third parties. So third parties are not a massive threat to Nintendo's success.
2) There are no comparisons here to support a lot of the logic people going by. So lets take a look at the most recent Skylanders, a games which audience is obviously skewed towards young kids.
Wii U: 380k
Xbox One: 170k
Even though the game performs best on Wii U, the sales of the game is doubled from 380k to 800k when you add the PS4/XO's sales on top.
Now lets look at Rayman Legends. A game that although is very child friendly, is made for people of all ages to enjoy (closer to the typical Nintendo title then Skylanders)
Wii U: 600k
Xbox One: 300k
Multiplatform is never a bad idea unless it affects the quality of the game or potential funding from sony/microsoft (obviously not relevant to Nintendo)
Like I said earlier, I made a thread a few weeks ago that shows the majority of Nintendo IP aren't directly affected by install base as much as one would think, many of their franchises sold a similar amount whether they were on a 30m, 50m, 60m, 80m, 100m or 150m install base. As long as the install base is big enough to support strong sales than Nintendo franchises mostly sell within a certain range.
One thing I need to note is that u are completely ignoring Nintendo's handheld, where their IP are still selling very well on, this thread is about Nintendo as a whole going 3rd party, not just their consoles so that's something that has to be taken into account.