Not even a 12.6 million install base can quell the phenomenal selling power of Nintendo software.

Mario Kart is unstoppable, and Splatoon has sold to a third of Wii U owners in just 8 months.

Don't lose hope for Xenoblade X, there's still plenty of time.

I don't think it's so much that they want to make their own hardware and are trying to sell it to consumers, but rather they can't afford to make the hardware that the consumers want from them and keep asking for.
That's because the hardware consumers want is the hardware that Nintendo is going to lose a lot of money off of.
Sony and Microsoft can do it because they have countless other divisions to make money off of to give them profits so that the losses they take on their gaming systems won't have much of an affect on their overall business. Because of this, they're able to go all out with advertisement and pricing so that they can have the biggest userbase and 3rd parties will flock so that they won't have to do so much 1st party games. Plus they get paid licensing for those 3rd party games on their systems, so that when it all adds up, they get that money back.
Nintendo isn't in that position, they're not the big, powerhouse, multimedia franchises that Sony and Microsoft are, if they take a loss on their gaming systems, they take a loss overall, and no gob loads of software will be able to make it up. I mean just look at the whole they dug themselves in from 2011 to 2014 when they were taking losses on the 3DS and Wii U when they first came out. That's why they're doing all these things like mobile gaming, amusement parks, talking about doing movies and TV shows, etc. So that they can be able to do that. I think that NX will be much closer to the type of hardware that consumers want from Nintendo, definitely more so than the Wii U ever was, but they'll still be easing back on it so that they can still profit off of each system sold.
The way I see it is if they establish a foothold and/or are successful in all these other ventures they are going into + NX is successful, then they can really start to loosen up and really go that extra mile on hardware and actually compete with Sony and Microsoft.

Except Sony/MS really didn't lose much money at all from their *current* systems. Both learned from last gen and choose more standardized architectures (ie: no wacky CELL based propietary chip). 

Nintendo was able to make a stronger system than the PS2 and sell it for $100 less at launch with the GameCube. 

It's more that they have chosen to embrace (for lack of a better word) crappier hardware and bet the farm on a control/visual (3D) feature to sell their systems in the last 10 years. Sometimes it works, sometimes it fails miserably. 

Come on XCX, if your predecessor has a real shot at 1 million, you should absolutely be able to reach the mark, and then some. I believe in you!

Well, at the very least, the hardware numbers aren't overtracked. I know, I know, not saying much considering the situation. But hey it's something.

From eletercero on Neogaf:

Splatoon has now sold more than any Metroid, F-Zero, Star Fox, or Fire Emblem game. On a 12.6 mill userbase.

Impressive.

What's more impressive is there is a chance splatoon will become the most popular/biggest ip in Japan in the near future. It's already number 1 for HC games this gen with only FFXV and maybe DQ11 giving it competition and that's with a 3mil installbase. 

I wouldn't be surprise if it comes up to pokemon/AC level tier

It's a legit phenomenon, it's too bad it's stuck on such a dud of a system (market wise). 

It's like watching an incredible superstar individual athlete stuck on a really, really bad team, kinda like Michael Jordan on some of those bad early Bulls teams lol. 

I think Nintendo may have to prioritize getting it onto the NX very early in the life cycle. Probably also been an eye opening lesson to Nintendo that they need to try more original games. To be honest I never understood why they just abandoned the shooter marketspace, GoldenEye was a huuuuuge hit for them, Perfect Dark did well, and then ... Geist and nothing after that. Really short sighted. 

Profits are down, operating income is up though.