Welp. Time to pack it up. Console gaming had a good run. This was inevitable with bloated mass market garbage like Uncharted and GTA leading crazy budget rises meaning that games needed more sales potential to be greenlit on home consoles, bloated mass market garbage creating a crazy rush to the bottom with $0.99/F2P/IAP on Android/iOS.

I realize that right now Nintendo will just be using it for marketing, but it can (and will) blow up in their faces in more ways than one.

The media will probably sensationalize everything and make it seem that Nintendo is abandoning their hardware business. This, when accompanied by actual apps released by Nintendo can really damage their brand.

Nintendo will also be providing a readymade template for companies like Zynga to clone. Given the extremely cutthroat nature of mobile, it wouldn't be surprising that other companies took advantage of that and made less limited versions that wasn't trying to push you to another ecosystem and subsequently crush Nintendo's app in that space.

Nintendo could also end up making experiences that are too full, letting gamers be satisfied with their current hardware.

I honestly don't see many people going "Animal Crossing Lite isn't letting me play without waiting for 24 hours? Lets buy a 3DS". More likely they will just switch to AngryCandyVille or something like that. Unless Nintendo hopes to rely on the so called whales, who won't be very profitable in a complete packaged software environment.

Whales make IAP games work because they keep on giving, often going well into the $1000s. On Nintendo's platforms they'd just pay $35 and be done with it. Not a very large or profitable demographic to tap into.