They were doing pretty good until they abandoned the Genesis in favor of the Saturn. If fact at one point they had grabbed over half of the market. Trust me if Sega wasn't so poorly managed we could very well have had much better effort from Nintendo.

This thread is being tugged in all directions, but scarcely in the one the OP meant, I suspect. I'd rather go back to the root of it all.

I'm still trying to understand how in practice the quality of what, say, Naughty Dog or Bungie produce as a development studio would be improved if the parent company was a "games only" company. Or are you talking about a more general "bird's eye" direction of the work of the studios in a collective sense?

Because I can't see -for what I know- much difference in the way Bungie, Naughty Dog or the Nintendo studio responsible for SMG tried to cater to what they thought were the customers' needs and desires. And as such I can't see all the influence of the parent company being or not uniquely focused on games, at least at studio level.

"If's" are pointless:

IF the N64 had used CDs as their media, FFVII would have been a N64 exclusive

IF the PS3 had launched @ $299, it'd be ahead of at least the 360.

IF Sega had better business management, they would haven't exited hardware.

This basically does nothing but state what most human beings wish they could do if they screw up, do it over. In life, "what ifs" can't be taken into account. The fact remains, Sega didn't give Nintendo the trouble you claim it did, it just didn't. Nintendo handily beat them generation after generation, despite the awesome company Sega is.

Ah, but Sega were a pure gaming company. Thank you for that.

Your logic just collapsed like a flan in a cupboard (or the Ottoman Empire).

Explain why they LOST to Nintendo by 20mill that gen, you think that happened AFTER the Sega Staurn was released/announced? No, Nintendo's hardest times didn't arrive until Sony entered the scene. No matter how comparable Nintendo and Sega were, Nintendo usually wiped the floor with them at retail.

It's a matter of incentive if Naughty Dog or Bungie had not been acquired they would have to work way harder to be noticed and their business would rely even more making well received games.

If Naughty Dog and/or Bungie came out with consoles to which they'd have to be responisble for R&D, manufacturing costs, learn distribution, learn advertising .etc they would really have to work harder on the games because it would be their companies on the line if they'd failed to sell enough systems to brake even. Investors/Venture capitalists and Banks would then try to sell those companies and offices would close down. I can't think of a better incentive to produce the most widely popular games imaginable.

What will say......THIS gen be remembered for?

The few weeks that the PS3 was "neck & neck with the Wii? The months and months it beat the 360 in hardware, while STILL being significantly behind overall? No.

This gen will be remembered for the having the FASTEST selling console in the history of video games, the "UNDER DOG" overtaking the once KING known as Sony PlayStation. The outcome is what is noted, not the weeks that the systems were "neck and neck".

Sony fanboys spouting inaccuracies as usual, what do you expect from the VGchartz community?  

Here are the numbers of game franchises that each company owns, per Wikipedia:

Nintendo Franchises, 30 in total, go here to see them:

http://en.wikipedia.org/wiki/Category:Nintendo_franchises

Sony Franchises, 81 in total, go here to see them:

http://en.wikipedia.org/wiki/Sony_Computer_Entertainment#Software_Development_Studios

Microsoft Franchises, 65 in total, go here to see them:

http://en.wikipedia.org/wiki/Microsoft_Game_Studios

Now, those are just the number of franchises but I am sure that you are wondering how many games have come out of these franchises.  Well, if  we look at 2008 (2009 is not over yet so we should not use it).

Microsoft has released 19 games in 2008 (from Xbox 360/PC and Xbox Live combined).

Sony has released 42 games in 2008 (from Playstation 2, PSP, Playstation Network and Playstation 3 combined).

Nintendo has released 38 games in 2008 (from Wii, DSi and WiiWare combined).

So, as you can see, Sony does NOT make more games than both Microsoft and Nintendo put together. 

But threatening their families would work even better :)

Seriously, we're not talking of small "indie" games here, and by your reasoning we should see third parties efforts being so much better than they are in reality. On the contrary on all consoles first party software is generally of a higher average quality because it can count on more resources, more support, more flexible timetables.

The industry has grown enough that there are very succesful "smaller" games by indipendent developers, but if you move up to the higher tiers an indipendent developer might often find more remunerative going for the buck today than for the quality tomorrow. Being completely platform-agnostic didn't exactly make Activision or Ubisoft the heralds of constant quality and innovation.

Unless with well-received you only meant sales, but that didn't seem to be the meaning of your original post where you lamented the current state of the industry.