the boost in initial system sales at launch wouldn't justify the loss on games. Having 8 AAA titles at launch doesn't mean they'll sell 4 times as many systems at launch. In reality they'll sell slightly more. it would be a lot smarter to have 2 huge games at launch and release others every few months during the systems first year and sustain the level of hype to keep system sales consistently high and to give each game an opportunity to stand on its own and get the attention and sales it should.
Here is my line of thinking:
Traditionally, and especially now, ALL Nintendo hardware (Even the Wii initially combined with logistics issues) suffered as a result of stagnant software support. They desperately need 3rd party support, and even made light of that fact by having Reggie specifically speak to that Activision guy about Nintendo's Amiibo's and how they asked Activision how easy it was to work with Nintendo on creating different Nintendo IP characters (Flaming Bowser, etc) and then having Activision specifically state how they were given creative freedom. This was their viral message to onboard more third party support by making everything think it is now more easy to work with them. Something Nintendo hasn't recovered from since the N64 days when they fucked 3rd party squarely in the ass with ridiculous licensing fees.
They are not going to gain third party support when they do not have consoles in the market to target at the base, and they sure as well are not going to bank on seeing a successful "NX" be the answer when their last console stagnated so much (Due to software as always the case, prime example is look at 3DS sales once software started becoming more mainstream to support it) without seeing the base install of the next console be pronounced.
1st party NEEDS to be the loss-lead to launch the next console and they better have a shit ton of content at system launch so people will feel a pull to buy a system regardless of game choice because ALL their 1st party games are available at launch. This in turn turns around the install base, 3rd party sees it, and starts a development process to support it and plays catch up and Nintendo makes the money back on Licensing (Albeit, better than hamstringing everyone like they did back in 95) They also need a friendlier Online component, a better online market, accessible friend making (Christ anything is better than what they have at this point) and to basically catch up to where consoles have been for the last 2 generations.
Without this, they can kiss their next NX console goodbye as well and may as well sell off their first party IP's to Disney and get the hell out of the market all together. Because they do not have the leverage for 3rd party software installs without doing the above, they do not have the consumer trust any longer if they do not launch with anticipated titles galore, and they are flat out, out of fucking time.