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Userbase has nothing to do with a company leaving an industry. If that was the case, Apple with 4% of the PC market would be long gone. In reality, they're not gone, and they're profiting. Nintendo is no different. It doesn't matter how many developers are on board, it doesn't matter how many people own your system. What matters if profits.
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I think "money" matters more than "profits"... the more 'money' you are willing to blow to stop your system from floping directly effects how long you are going to stay on the shelf... more so than profits.
DC made more profits than Xbox, but that doesn't mean Sega had a chance in hell at staying on the shelves longer, does it?
I saw in a interview on G4TV that MS isn't even trying to make a dime of profit for both the Xbox and Xbox 2 generations... MS is in it for the long haul. Nintendo is (and has to) think about Making money in the next 12 months, MS is thinking down the lines of "20 years from now we want to own this industry"
Which completly destroys your point of profit being more important than the user base... MS isn't losing money for thier health, they are osing money so people likeme and you will go out and buy thier console and enjoy it so they can slowly take over.
Nintendo is more worried about profit than userbase because profits is somthing Nintendo
needs to stay alive... let Nintendo release one console like Xbox and they would have quit financially within a year of it's life.
Don't get me wrong though, eventually profits are important, but comparing MS to Nintendo in profits now doesn't make a lick of sense.
MS is simply gambling... they are betting money, and because they have tons of money to lose, losing isn't even a problem, but when they lose enough times they will have to get up and leave before they throw too much money away... As long as MS continues to grow as far as the userbase, they will be sticking around for a while... if Xbox 2 does worse than Xbox (not financially, but user base wise), well, lol, that's the end of Microsoft in the gaming industry.
MS is playing for mind share and in the end will try to profit... Nintendo isn't playing for mind share at all, only profits.
If PSP beats GBA, or GBA's big brother (whatever that may be called), Nintendo is doomed because they lost thier easy form of profit and thier mind share.
So to break my Post down:
Microsoft lives if: Each generation thier Mind share gets larger.
Nintendo lives if: They continue making a big profit
Microsoft drops out if: Thier Money wasting experiment doesn't work and Xbox 2 is outsold by it's predicessor.
Nintendo dies if: They stop making a huge profit, and GBA is over ran by PSP.
I think that they both may survive... for a couple of reasons.
1) I don't see GBA being completly killed off
2) Obviously MS buying it's user base is working because they are tied with the second biggest gaming console manufactuer in the world in it's first outting. (not quite Psx, but eh, do you really think Psx would have stood a chance released side by side with N64?
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You also gotta take into account that MS won't need to advertize half as hard next time around, and they don't have to sit there and buy out developer after developer again. They also don't have to pay to introduce Xbox live again...
If MS trys to make a profit on Xbox 2, they could, but I think they will still be trying to put more into dominating the mind share... a Sega buyout right before the start of Next gen looks extremely likely imo.