An ARM-based, modern, efficient console between XBO and PS4 (raw-power-wise) makes all the sense in the world. A few things to consider:
- Nintendo believes price is a primary barrier to be overcome in route to market share. Especially in a world where most people play free games on their phone. I can't find the Iwata quote, but it was basically along the lines of "$400 boxes that play $60 games is not a good long-term strategy." The market that does pay these prices for big, blockbuster games left Nintendo a long time ago (as this forum frequently points out). If Nintendo comes out and says, "here's a $400 box that has 50% more horsepower than your PS4 and maybe hopefully will build a respectable third party library (but almost certainly not compared to the other consoles)." Do you think PS4 owners are going to run and sell their PS4s? Assuredly not.
-Unless you're talking about VR or 4K, I believe we've hit diminishing returns on game graphics for the time being. Again, talking about the larger market. I see Uncharted 4, and it just blows me away. I don't think about the PS4 or XBO being underpowered for even a second. I think the larger market agrees- it's good enough for now. Hitting th he sweet spot between affordability and capability is the most important thing.
So if Nintendo comes out and says, "Here's a $250 box. It's small and efficient, but can absolutely handle anything your XBO or PS4 can play. It'll have beautiful Nintendo games and will also play the games from your NX handheld (speculating here). Also, here's a 3D Mario that will freaking blow your mind."
If that's what they say, I'm there. Find that sweet spot between accessibility and capability. It's not going to sell 100 million or maybe even 50 million. But I think, along with a handheld that shares some of its library and operability, it's a good long-term strategy.