Whoa hold your panties there...
1) "Just because my coworker(s)..." they are not alone... I've been playing for free for the last 3 years. I actually started to prove them a point. Well the point that was proven to me is that people get addicted... a dollar here a dollar there. Next thing you know you got a company like SuperCell pulling in $2 billion on 3 products and still keeps on going.
2) "King not doing so hot..." you're right, they dropped 10% 2015 down to only $2 billion dollars in sales. Probably Activision/Blizzard acquisition got people wondering (which they paid almost $6billion for). But yeah crappy $2billion in gross revenues for a software gaming company with a few products. The 2nd of the two biggest free-to-play company u are referring to is SuperCell.
http://www.pocketgamer.biz/list/62773/top-50-mobile-game-developers-of-2016/entry/1/
You have no idea of what you are talking about but thanks for your opinion anyway.
Let's look at the top selling games of every console...
https://en.wikipedia.org/wiki/List_of_best-selling_video_games
A majority of the top selling games sell about 5 million copies. Let's just say all the material (poster, discs, disc case is free) and games sold at $50 a pop. That's about $250 million. Multiply that x 3. That's about $750 mill... nowhere near $2 billion dollars posted by top mobile game companies. Yeah.... and guess what? They don't even have to spend money on making the physical product.
3)"Manufacturers fighting tooth and nail against each other..." that is one of the points about my previous post. Nintendo comes out with earth shattering innovation that is impressive for about an hour of play... then everyone is back to let's play some fun games. As cool as the tech is... it is no more than a gimmick that maybe barely keeps them in the picture (because tech gets copied).
4) "Game developers only make a profit on free-to-play games...games costing more than $5 are dead" yeah if that is the case console gaming would be completely dead...
5) "Complete garbage after 2 years".... hmm... isn't that why all gaming companies continue to develop day in and day out? You expect say a game is designed to be played over and over for 5 years? 10 years? forever? As nostalgic as Hogan's Alley or Duck Hunt is... you plan on playing it for hours on end 20 years later? How about something recent like GTA...
Android/mobile platform gaming has it's place and it's target. Most of the games are lightweight and made for a quick-whip-out-and-play... Whether ur at the mall bored as ef, sitting in the doctors office, on the train... that's the niche. That's where they make their money and IT MAKES money!
6) "It will have obsolete hardware in one year...." let the hardware manufacturers worry about that. Again... top 2 grossing games on android don't require much hardware. Can be played on multiple platforms. The platform manufacturers drive the hardware upgrades themselves anyway... (A Samsung Galaxy S7 Edge isn't designed to play Candy Crush... nor is the latest Apple Ipad Pro... etc etc....)
7) "Online gaming would be a hacking nightmare in six months...." but yet they still exist hack free whether mobile platform or console. Because server side hacking works.... mmmhmmm... Even after the console get's hacked, server side game data are still untouched... that's why just about every single mod out there requires you to be offline. Do you even think about what you write?
8) "Nintendo will lose control of the platform in one month...." as if they haven't lost control of their platform for any of their systems in record time over the past 7 generations. :rolleyes All of their systems to date have been emulated x86.. the same cannot be said for M$/Sony. What prevails for any platform is server side data end of story.
9) "How's OUYA doing? Attaching a name brand to it will not solve the problem..." OUYA is about as name brand as Wintendo... Again it fails because it's model is based on hardware revenues. A $20 chinese android media box with a $20 usb controller is capable of doing the same thing OUYA is doing. Has OUYA developed any exclusive games? Apple makes iphones/ipads.... the bulk of their revenue is iTunes. Are you starting to see the picture yet? If not go back to point 1 up there and start reading again.
Nowhere in my post did I suggest Nintendo abandon hardware or go full android. What I DID suggest is they stay their course making mobile/portable and consoles separate but yet create a viable marketplace that is multi-platform. Many of your android/ios games share the same server data across different platforms. If they want to drive hardware sales they can make exclusive software or ingame digital content. Making stuff like the WiiFit are a hit or miss, 15 mins of revenue fame.