It is now confirmed that Nintendo is allocating internal software development resources to the creation of smartphone games, which will hinder the pace of releases for their core platforms and business model.
I think what we are likely to see will be structured as such:
Nintendo next home platform:
Plays dedicated Nintendo NX games
Plays Nintendo smartphone games
Backwards compatible with Wii U games
Possibly also plays Nintendo 4DS games, akin to Super Game Boy and Game Boy Player, in order to bolster the console's library and not end up with another Wii U situation
Nintendo next handheld platform:
Plays dedicated Nintendo 4DS games
Plays Nintendo smartphone games
Backwards compatible with Nintendo 3DS games
Adoption of Android at the core of Nintendo's next platform has at least six huge benefits:
1. Android is a robust, proven platform which is extensively supported;
2. It further-increases the content available on each Nintendo platform;
3. It allows for easy porting of games and sharing of assets from platform to platform;
4. It allows for Nintendo's engineers to easily develop for any platform;
5. It allows for easy integration of DeNA's services;
6. It opens up the opportunity for much more third party content.
Should Nintendo's core business model flounder further, this also allows for easy porting of titles developed for NX, 4DS, and future platforms to smartphones in the future.
It has also been reported that Nintendo will shift to ARM chips for their next platform(s). ARM chips are used widely in smartphones (as well as inside PS4 and Xbox One) due to their low power consumption and small footprint.
While a proprietary platform may have previously been on the cards, as of this week, adoption of Android is now the most efficient use of Nintendo's resources..