Copyright infringement is not just an issue of money. It also effects the public's impression of the characters therein. A fan-game which depicts Mario in an uncharacteristic manner, or is simply not a high quality game can reduce the general public's impression of the character. You may say, "That's stupid... Everybody who plays a fan-game KNOWS it's not official Nintendo and they think nothing of it," but the fact is that there is a subconscious effect which cannot be controlled or measured. Furthermore, if you get your full taste of Mario in non-official games, suddenly the official ones are not quite as enticing... Scarcity of games actually increases the craving and thus increases sales. Nintendo's biggest strength is in its well-known first-party characters, so they do everything in their power to protect that. Maybe it's overplayed paranoia, but this is one of the arguments against fan-games.
On the console argument, you really need to look to Japan to understand this one. (Since Nintendo America is not making any of these decisions, and both Sony and Nintendo are Japanese-based.) In Japan, Sony is much bigger competition than they are elsewhere. 3DS still blows away PS Vita any day, and Sony has as much as admitted defeat, but at least in their early days there was some real competition there. Secondly, I don't see anything wrong with Nintendo trying to be innovative when it works. It's gutsy, but hey, I love a unique gaming experience and that's what is special about the Wii for millions of people. The numerous iterations on hard-ware are a result of demand, rather than an innovative or cash-hungry attempt on Nintendo's part. Mobile devices got smaller to the point where they are getting bigger again (you know what I'm talking about - BIG smartphones...) The XL was about recognizing this shift in market and giving the consumer what they want. Likewise, the DS was very popular with younger children, but the device was a bit too easily damaged and the 3D on the 3DS was not child-approved. To fix this, they had to provide an alternative, but some of the design decisions to make it child-proof would not provide a better gaming experience for older gamers, so they marketed it as a separate device rather than an upgrade to the existing 3DS. I would argue that Nintendo is not necessarily suggesting you buy a 3DS, 2DS, and a New 3DS XL... Rather, for people who do not own any, they have more choices to pick from based on their needs.
Just my two cents.
On the console argument, you really need to look to Japan to understand this one. (Since Nintendo America is not making any of these decisions, and both Sony and Nintendo are Japanese-based.) In Japan, Sony is much bigger competition than they are elsewhere. 3DS still blows away PS Vita any day, and Sony has as much as admitted defeat, but at least in their early days there was some real competition there. Secondly, I don't see anything wrong with Nintendo trying to be innovative when it works. It's gutsy, but hey, I love a unique gaming experience and that's what is special about the Wii for millions of people. The numerous iterations on hard-ware are a result of demand, rather than an innovative or cash-hungry attempt on Nintendo's part. Mobile devices got smaller to the point where they are getting bigger again (you know what I'm talking about - BIG smartphones...) The XL was about recognizing this shift in market and giving the consumer what they want. Likewise, the DS was very popular with younger children, but the device was a bit too easily damaged and the 3D on the 3DS was not child-approved. To fix this, they had to provide an alternative, but some of the design decisions to make it child-proof would not provide a better gaming experience for older gamers, so they marketed it as a separate device rather than an upgrade to the existing 3DS. I would argue that Nintendo is not necessarily suggesting you buy a 3DS, 2DS, and a New 3DS XL... Rather, for people who do not own any, they have more choices to pick from based on their needs.
Just my two cents.