**Wooshing back to 1992** "Sonic on a Nintendo Console? Not likely"
Long-winded reply ahoy!
Nintendo is in a much stronger position than Sega was stepping into the next generation back then, and they're not going to make the mistake of continually releasing hardware as they did with Sega CD and the 32 X. Any hardware additions that Nintendo has been serious about pushing have done very well over the years - is it their fault if third parties didn't seem that interested in putting in the extra work in order to use Motion Plus? Of course, on the other hand, not every game needs that.
People have been predicting Nintendo's move to a software-only development house for years now, especially since Microsoft has entered the race, because how can the comparatively small Japanese company compete with such a large threat? After the poor performance of the GameCube (yet it sold only two million less than the XBox, iirc), everyone everywhere claimed that Nintendo as a hardware company was finished, that they were unable to compete in a new world of videogames filled with giants such as Microsoft and Sony.
Yet they had the foresight to adopt the Blue Ocean strategy and targeted the non-gamers with Wii, which became an immediate success. Sony reacted by developing a half-assed effort, the Sixaxis, ridding the Dual Shock of rumble with Phil Harrison making the mistake of claiming rumble to be a "last generation feature" - except everyone could smell the desperation coming from Sony in waves. Eventually they could no longer ignore the Wii's success and they got rid of Sixaxis, brought back rumble, and released Move, while Microsoft jumped at the chance to develop a technology that had previously been offered to Nintendo - but who had turned it down.
Then there's the DS. When it was announced, and the PSP was announced, that was it for many - Nintendo were doomed again. How could that ugly piece of grey weirdness compete with the slick Sony device? The GBA had done well, but Sony's entry into the handheld market surely meant the end of Nintendo's bread and butter there - coming strong out of the gate with the success of the PS2 behind it, the third parties were on Sony's side. Man, even Nintendo fans doubted the DS would sell much even if the PSP wasn't releasing soon. But as we all know, the DS went on to sell gangbusters and the PSP managed to sell just under half. Sony tried again with Vita this generation, with a larger, nicer screen, and it's bombing, hard. Meanwhile the 3DS is managing to sell more units faster than even the DS... which was certainly no slouch in that area.
Nintendo typically sells it's hardware at a profit, which means all those millions of consoles plus all the software they have developed that continue to sell year on year (such as Mario Kart Wii, with 32 million units sold) has given Nintendo a huge amount of money to sit on. Sony has been imploding over the last few years, with many of their key businesses failing. They have so many products and divisions that their focus is split, forcing various employee reshuffling and serious internal restructuring. Nintendo on the other hand has only one focus - gaming. And they are masters of their craft, both in their innovative hardware design and their ingenious software. And they are ready to admit when they've made mistakes - when the 3DS failed to take off as they had anticipated, they cut the price so that they were no longer making a profit on the hardware, publicly apologised, got rid of the bonuses and cut employee pay on many of the higher-ups who were responsible for the flagging sales. Would Sony or Microsoft have done that? I think not.
Nintendo has shown that they are not afraid to think outside the box and take risks - when their home console business was threatened by the arrival of the gargantuan Microsoft and the resulting reduction in sales of the GameCube, they took an enormous risk by not developing the Revolution with next generation hardware, but continued to use GameCube hardware, just with higher clock rates. Does anyone remember the meltdowns when the Wii Remote was announced? The reaction of most was to claim that Nintendo's days in the hardware business were done, especially further down the line when it was revealed just how weak the hardware was. That combined with the strangeness of the DS up against the slick new Sony challenger in the PSP meant everyone left, right and centre were forecasting Nintendo's doom.
We all know how that worked out, with Sony and Microsoft struggling to play catch-up. To sum up Nintendo's philosophy on gaming and their role in it, back before the launch of the GameCube (iirc) Howard Lincoln was asked that if the GameCube failed, would Nintendo ever bow out of the hardware business and become a third-party software house working on Sony systems? Lincoln replied that Nintendo would
never allow Sony to become the de facto standard. I do not believe their philosophy has changed - it would take a monumental disaster for Nintendo to leave the hardware race. In a time of huge iOS and Android successes, many predicted the end of the handheld, yet the 3DS has sold more at this early point in it's lifetime than it's predecessor has. What one hardware model (or series of model that uses the same hardware) that runs Android has sold more than 152 million units?
The reality is that Nintendo is important to hardware, and as long as they want to control the user interface in their games, hardware will be important to Nintendo. People should stop predicting their doom with every generation and be glad that at least one company has the balls to try something new.
So... the Wii U is looking nice, huh? 
(edit, slk got there first)
