That is not correct. Nintendo's profits, for example, will be going towards theme parks and... mobile "gaming". It goes towards making collectibles as well. And from basic observations it's obvious that Sony invests more in games than Nintendo.

Where

This is essentially my biggest issue. I don't mind paying for PSN given that I was subscribed to it back during the PS3 days when it was optional, but back then Sony actually tried very hard to put up amazing games every single month. It was always exciting to see what games they would be offering every month and there were generally always 2-3 games I'd be interested in.

Now I'm surprised if I even find one interesting game in 6 months. It's all just uninteresting indie games that just doesn't excite me. I'm not hoping for them to give out 4-5 AAA titles ever month, but at least try to put out 1 game that generates some buzz.

Doesn't this include all of Nintendo, the 3DS aswell? 

Yeah it definitely has! 

Nintendo really needs to step up in this domain, I rarely bought digital games on the Wii U or 3DS because they are so expensive with not enough sales.

Luckily it will be cheaper than the other 2!

obviously this will be a very good business model for nintendo then. Nintendo has been missing out on a lot of free money up until now.

Switch will get far more attention from Nintendo profits than cheap mobile games, that was a laughbly weak jab.  As far as theme parks, it is highly likely that the returns will be worth the investment (which means more money for games and other expansions).

Also the theme parks are likely to ve Nintendo themed, making them unique.  This will further advertise their games which will lead to more game sales, which translates to more profits.  It is a win/win investment.

Sony on the otherhand has been bleeding money in other divisions for years.  While Nintendo has lost far less than Sony in recent years due to the fact that other Sony divisions negate any profit the gaming division sees.  It is only recently that Sony started getting better as a company, and they still have a long eay to go.

All in all though, I am glad both are doing well.  My PS4/WiiU (and now Switch) combo has always been the best in my eyes for console gaming.  My X1 on the otherhand...that thing sees nothing but dust.

A shit ton of indie,  AA and AAA software is also sold on psn.  Especially through the amazing online sales. FTP titles also sell a lot of online transactions.  They are big contributing factors to this crazy high number. 

Nintendo will obviously increase a nice amount when the paid online comes in but this holiday 2017 is going to be insane on psn.  The graph will increase a lot.