Car companies have factories here because it's cheaper than having 10 million cars shipped from overseas.
Then shouldn't that also apply to video game systems as well? All Nintendo hardware is manufactured in China, and Foxxcon is known for its poor treatment of its workers. Nintendo could build their own factories in Japan, Europe, and America, where they can have unionized workers. And they wouldn't have to worry about overseas shipping costs, since each region would manufacture it's own product.
The reason why no console platform manufactures in the US boils down to cost. If Nintendo were to choose to shift manufacturing of US retail consoles to the US they would first have two choices: vertically integrate and operate their own factory or find a manufacturing partner. A US manufacturer who could crank out the volumes of product required no longer exists here...so Nintendo would be forced into option 1. This requires set up costs for the factory, hiring and training of a labour force, equipment costs and don't forget the ongoing cost to operate the factory.
Then, they must also consider factory output and when to scale back production if retail channels are already full. Do you still have to pay workers even when they are not working? Most likely, terms such as these must be negotiated wight he work force. Unions add another wrinkle...as an organized labour force, they gain a legal right to strike if they disagree with work or compensation conditions. Another body to negotiate with, another layer of overhead as all production considerations must now go them as well and a constant threat of a crippling labour stoppage.
Also, workers in the US would command significantly higher wages as well as adequate health and Retirement benefits adding to the cost incurred of each hardware unit produced, either resulting in higher prices for us end users at the top end of the chain or a reduction in the company's gross margins which would make shareholders very grumpy. Investment in factories is a long term investment so you'll be on the hook for significant costs for land leasing, equipment and whatnot for years.
Now does the cost of outsourcing production and shipping worldwide from China outweigh these costs and, crucially, RISK? Well of course, no it does not...which is the conclusion Nintendo and it's competitors and all of our greatest tech companies arrived at all those years ago.
There is another question of whether relying on this form of cheap labour is morally in the right...but that is an entirely other discussion and the crux of it really lies with whether or not enough people like you and myself are willing to reject consumption of these cheaper goods on moral grounds.