I'll take your word for it, Ian.

Anyway, you raise a good point that Nintendo is sacrificing a lot of control and would be putting a lot of control into 3rd-parties- that's something I didn't consider and I'm sure Nate didn't, either. You also raise the idea of ports, but that shouldn't happen if Nintendo launches a year earlier than the competition. It won't get ports of PS2 and XBox games and it will get the first versions of next-gen games since the PS3 and XBox 2 won't be out for another year. I do agree that limited exclusives would be a great idea, but they have to be BIG name 3rd-party titles (like GTA, which I pointed out- not Rayman or anything).
You're right that this realistically wouldn't make Nintendo unstoppable, but if Nintendo does launch a year earlier than the competition AND impliments this plan, or something similar, it would give Nintendo a gigantic lead over the PS3 and XBox 2 since it will be building it's sales and game selection for an entire year before any opposing consoles are released. Look at the PS2- it may not have had any real big titles for a year, but it had an excellent variety and people who were holding out to see what the XBox and Gamecube had probably went with a PS2 due almost soley to the much wider selection. On top of that the PS2 had been accumulating sales for a year before it had any competition and acquired a lead that neither Nintendo nor MS could hope of overtaking. Nintendo would be replicating this, essentially, except on a larger scale, hopefully. I fully agree Nintendo needs a complete change of practices to take the leader, but they need a turning point to give them a bit of leeway, and a deal like this would be perfect.