I think it's a bad idea for Nintendo to stop making hardware. Nintendo's hardware has traditionally been profitable, though the Wii U is unfortunately sold at a loss. And Nintendo runs less of a risk of marginalization if it has a way to get content directly to consumers. Consider the cases of Google, which runs wildly popular services but still decided to pursue its own OS, or Amazon, which provides wildly popular content but still decided to build its own tablets. When Microsoft wanted to push its new OS and apps (Xbox Music, Bing, IEWhatever) onto consumers, it built its own tablet. The common thread here is that by building your own hardware, you control your own destiny. That's obviously a double-edged sword if you end up building bad hardware. There are some miscellaneous benefits. You collect money from software that people sell on your console. You can run your own store and push the software you want at the times and prices that you want. Also, while a complete failure of the Wii U would be disastrous, Nintendo has the strength to absorb the loss. They're pretty liquid with $5 billion in cash assets, and they have about the same in bonds. They're no Microsoft, but they can weather the storm. I would say that there are ways for Nintendo to avoid the storm altogether.