Actually, it would explain very well why Nintendo would never get into, say, DVD players, HDTVs and such.
And Nintendo's per-capita profitability also explains why Microsoft is so desperate to break into video games, except that they just haven't been able to replicate the magic so far.
MS has done pretty damn well in gaming. They've been 2nd now in 2 straight generations, and their XBox Live Arcade (which has near 100% markup) is supposedly raking in millions each day. Everyone was expecting another 3DO, and instead they dethroned PlayStation.
Their performance might not seem as impressive as it is because they have other multi-billion dollar products, but the Xbox has been a gangbuster success for Microsoft.
Look at it this way. If you think Microsoft knew, when they started their foray into the video gaming world, that they'd be exactly where they are today that they still would have done it?
My guess it they're REALLY happy with the way it worked out.
And Nintendo's per-capita profitability also explains why Microsoft is so desperate to break into video games, except that they just haven't been able to replicate the magic so far.