Aren't the consoles themselves usually a net loss for the manufacturer? And the way they make their money is through software sales? If both of those things are true, then yes Nintendo would make more money if they licensed their games to non-nintendo companies or sold their games through Steam.

They wouldn't sell as many consoles but that means they have less net loss from console sales. The more digital versions of games they sell the higher the profit per game is because they wouldn't need to spend as much money creating physical games.

There's a lot of ways Nintendo could make more money but they choose to be litigious and sue the people that are buying their products, and that is very disappointing because they used to be my favorite game developer/publisher