as someone else pointed out, creating what is currently considered a 'powerful' home console is not really a difficult or complicated thing- NIntendo could easily do that. BUt it's clearly not always the logical move. We all know, foe example, that Nintendo is pretty strict and likes to make money even off of hardware.

Bear in mind Microsoft is likely losing money from the Xbox One X that will be coming out.

the Switch is more cleverly designed than anything I've ever seen from Microsoft as far as game consoles, hell the Gamecube was like 1/3 of the size of the OG Xbox yet competitive in some specs. Nintendo is more capable in efficiently putting out systems that provide great experiences to consumers at an affordable and flexible pricepoint imo 

simply making a beefy spec gaming box is far from a complicated thing to plan and develop, it's not a coincidence that at times Sony and Microsofts platforms have been somewhat similar in terms of build and specs. 

Nintendo probably made more money from the Gamecube generation than Microsoft will from their Xbox One gaming generation.... efficiency is key. The Gamecube also had a relatively short life cycle (really like 5 years?)

For the past few generations the Xbox brand has been a money pit for Microsoft. And at this point its obvious why they bother- they are pushing towards trying to bring the gaming market into the PC (Windows) market so they'll have a big control of the pie. It's worth the investment for them.

The fact that you seriously think that Microsoft is in the gaming market with the Xbox to genuinely just play the long game with home consoles it just asinine. They don't make much money from it. Their goal has been quite obvious for a while, pull gaming towards a unified Windows platform where their software programs for PCs make them the real money (wouldn't surprise me if they hope to have some sort of Windows gaming app to sell eventually either)

Honestly the title was too much alone to resist jumping into this thread. Really great job with this one, Soundwave. Got me good.

Copying paste from other topic, with some changes:
I can imagine great things happening.
One could help other plataform, and lots of players could want to own the 2 plataforms, in a simbiose system, which they are not competitors, but can help each other. Also, they keep their different phylosofy, while give more options for their consumers.

-Nintendo offer the subscription free games/online for both xbox one and switch, and demos of switch games on xbox, and maybe some old games. MS also provides the entire online service and achievements.
-Xbox publish rare games on switch(and maybe original xbox games) to run natively on switch, and stream xbox one to nintendo switch for live gold members, and demos of some xbox one games(if possible).

lots of xbox one owners would lite to have a switch(where the complete experience of nintendo games are), and switch owners would like to have a xbox one(to play multiplat games on switch screen, good online infrastructure and achievments). And why not colaborate in some games?

Market cap is currently at $37.7B. You're right though - the Japanese government would move to block it. They'd be better off buying Japanese devs themselves like Capcom.