My rule is 3 games I want, and I buy the system. So far Mario Odyssey is the only title that appeals to me (I have Zelda on my WiiU). So far this gen, my Xbox One and PC suit my gaming needs - which kinda sucks as I usually buy all the relevant consoles in a generation.

That said, I welcome Nintendo going 3rd party.

And this is a good thing because the dominant console brand has been holding back the entire game industry for 22 years. Making it worse, even, by focusing on the business and not the craft. It's about time for the best home platform to become the only home platform, and that is PC.

(Ninty can keep doing its stuff as long as is unique, otherwise they should come to PC too.)

BOTW on Switch is a port of the Wii U game. Not made from the ground up for it. The Wii U and the Switch have very different hardware architecture. I doubt you understand what that implies, but I think it's important to point that fact out. 

Based on all the comments you post here about Nintendo, I don't think you're remotely honest when you say you "really wanted Nintendo to compete in the hardware business".

And most Nintendo games are of utmost quality, no matter what system they release on. What you want is higher visual fidelity, which is not necessary tied to games being of higher quality.

This is ignoring the side of their business that makes up 80% of their userbase, adding that to the mix negates your first two points.

If Nintendo should go 3rd party because of Wii U bombing than Sony should go 3rd party because of Vita failing.

Nintendo had 2-3 years of losses recently but the previous 25-30 years were profitable, if you are profitable as a hardware manufacturer for 5 generations you dont just jump ship after 1 generation of moderate losses. Even so, by that logic than Microsoft & Sony should have went 3rd party after the original Xbox & PS3 lost them billions.

Not liking their hardware or online services are legitimate reasons I suppose.

If Nintendo would go third party, they wouldn't have to make games to feed their own hardware anymore. So expect everything getting axed apart from Mario (only Jump&Runs & Kart), Smash, Zelda, possibly Splatoon, Fire Emblem, Pokemon and Yokai Watch (and for the latter 3, Nintendo already decided they would only sell on mobile devices, and since the competition doesn't make handhelds, so that would mean Smartphones only for them). Everything else is history, no more Metroid, F-Zero (They are already reluctant to produce them because of bad sales and low profits), Paper Mario, Pikmin, Kirby, Xenoblade and so on.

Just look at Sega how it went for them. Anything that wasn't Sonic is basically forgotten and rotting in their IP attic. I really doubt it would be any different with Nintendo. Just a new Mario every year and maybe some other game in between sometimes, that's about it if Nintendo goes 3rd party.

Last but not least, Nintendo repeatedly said they consider themselves as a toy company, meaning that they would leave gaming entirely if they couldn't sell any hardware anymore.

So no, there's no way I could agree to that

i voted 1st option

When you have sentences that are 88 words long it can get a little confusing ... just saying

I just looked it up and i will concede that you are correct based on this definition of innovate :

"make changes in something established, especially by introducing new methods, ideas, or products."

By this definition then the big 3 are all innovating anytime they implement something with a slight change for example "pressing down on the analog stick for R3/L3" should be considered an innovation, adding a second analog stick would be innovation, moving the second analog stick off center would be innovative.  Previously I would have said they were just refining someone else's innovation but I guess I would have been wrong.

So Le Stick created motion controls and the WiiMote was the innovation.

I think that there is a bit of a bar for what can be considered "innovation". A change needs to be of a certain magnitude (although this is technically unquantifiable) in order to be considered "innovation proper" and not just "technically innovation". Basically, we get tiers of "innovation" that would look something like this:

-Stagnation: No change
-Iteration: Small improvements which do not change the overall gameplay experience (ie, Clickable sticks)
-Evolution: Larger changes which noticably improve the overall gameplay experience (ie, Second Analog stick)
-Revolution: Large changes which go down a seperate path of gameplay experience (ie, Motion controls)

When someone says "only Nintendo innovates with their hardware", I think using context clues one could assume that they are saying "only Nintendo revolutionarily innovates with their hardware". 

Doensn't mean it's going to happen though.  Production can always be scaled back too if demand turns out cooler than they are *projecting*.

I hope they don't over produce, and get stuck with a stock pile of consoles like with Wii U which never got any revisions in the entire life of the console.