What if Nintendo "did a SEGA"?

Let's say, hypothetically, Nintendo pulls a SEGA and jacks in the Hardware biz to become a 3rd party company, developing only games.


It sounds at least like an idea worth considering, after all it worked for SEGA. The Sonic creators were in deep financial trouble following the Saturn and Dreamcast, but managed to turn their fortunes around by quitting the hardware business entirely. So there must be something in it, right?


The difference (the Nintendo difference, if you will) is that SEGA were up the creek with barely even a boat, and rabid horny alligators closing in from all sides. In contrast, Nintendo is printing money and lots of it.


Sure, Nintendo would have a larger potential audience, but would it really make much of a difference in sales? As far as I can gauge, the people who enjoy Nintendo games already buy their consoles, so it may be that games like Mario Galaxy and Metroid Prime 3 would not shift any more units even if they were available on 360s and PS3s. Any extra money made from selling on more platforms would have to first negate the money they lost due to withdrawing from the hardware race.


Even as gamers jumped ship from the SNES to the PlayStation, in many cases never to return, Nintendo remained profitable. Back in the Gamecube days when this all looked extremely possible, and even fanboys like myself were beginning to think it might not be a bad idea, Nintendo was unconcernedly making money. So now, with the phenomenal success of the Wii behind them, why should Nintendo consider 'doing a SEGA'?


The reason I present this idea is that I, as both a gamer and a Nintendo fan, believe Nintendo would make better games if they were free of the need to compete against Sony and Microsoft. I don't care about profit margins as long as I get to play good games, and this of course is where it all falls down. Nintendo is a business, and so has no choice but to care about profits over increased game quality.

Although, perhaps this is all because I know for a fact that neither Sony nor Microsoft would have released WiiFit. I hate that thing.