I frankly don't see why that'd be an issue at all.
For one thing, you can bet half their titles would never get released outside of Japan. Not to mention Nintendo would keep sticking their nose in their business. Persona 6 Featuring Mario? It can happen.
I don't know, I don't get this whole "Nintendo ruins everything they touch" logic.
People kept saying that about Bayonetta 2, how they'd make it shit because... they're Nintendo. Now that we saw gameplay for that we know that nothing bad happened to the game even though Nintendo funded it.
I really think they'd just let Atlus do whatever they want as they are, except their games wouldn't be on Sony consoles anymore. And I don't see that as a problem.
The incredibly reduced install base isn't a problem? Take 2 estimates that there are more than 120 million Ps3 / 360 consoles combined as of June 7 (source). Add whatever amount of Vitas have been sold to that, plus add Atlus small but constant PC sales (they've published a number of indie games.)
Now, some places say the Wii U has sold much, much less than that. (Wikipedia says 3 million as of March, though I suspect the number is much higher after the Xbone presentation.). The 3DS? 31 Million.
Which means a lot less revenue. A lot less people to sell games to.
Also, they don't ruin everything they touch - but Megaten has always been a series that is completely different from anything Nintendo's ever produced or funded. Very unlike their "family friendly" style.
Gotta agree w/ Foxhack on this one because:
1). Like he said, the size of the install base,
2). How far off (something like, say, the SMT series) is from the games and tones/styles of games that Nintendo does well, and
3). Look at how many Atlus (and NISA, even) games have started out as "console-only" games...only to later receive ports/re-makes (usually w/ more features & content) on the hand-held systems.
Though I always prefer a console's ability to use my fav controllers & play on a big screen instead of a tiny one...I'll always be strongly for *BOTH* (Niche games (my favorites:) getting released on as many different platforms as possible) in order to reach as many gamers & support their developers & creators as much as possible.
I guess that a more "recent" example would be Persona(s) 3 & 4...sold great on consoles - then sold great on hand-helds = (IMO) win/win