I'm not so sure. Nintendo is fully aware that lack of 3rd party support hurts them.

Does it, though?

I feel like it's too little, too late for Nintendo. I don't see many people jumping ship from PS4 or Xbox One just because Nintendo finally pulled its head out of its ass and decided to make a console that has some sort of parity with the other two after more than a decade. But we still don't even actually know what the NX is, so maybe that's not even true.

I still wish they'd just go the Sega route and stop making consoles and become a publisher. I want to play the new Zelda, but not enough that I'm going to drop hundreds of dollars on a console.

In the long run, yes it does IMO. The complete lack of 3rd party support on Nintendo consoles turns them into a great choice for someone's 2nd console, but rarely do they win the "if I can only pick 1 console" battle. Back in the N64 days, they had just enough 3rd party support to bolster their phenomenal 1st and 2nd party lineups and do quite well overall. The Wii was lightning in a bottle for a couple years, but the floor fell out from under them quite quickly there. And the Wii-U has been a pretty clear failure. Their 1st party lineup isn't as stellar as it once was, and they don't have in-their-prime Rare to back them up anymore. They need strong 3rd party support if they ever want to convince the larger gamer market to buy an NX instead of a PS4 or Xbox.

I want to play the new Zelda, but not enough that I'm going to drop hundreds of dollars on a console.

Having been an old school Zelda fan myself, the new Zeldas are pretty shit. It's like they are trying to copy the elements of Zelda without understanding why they were there and why they worked. It's been that way for a long time so I've heard.

If so, that's a lot to squeeze into roughly 6 quarters.

Just pointing out that the only thing which has less evidence supporting it than the "leak" itself, is this assumption that the supposed reboot/re-org/whatever is happening NOW. If it's a real thing at all, it probably happened sometime in the past. Presumably after TTK, though.

The last ten consoles were the big limiter on draw distance and memory, both of which they should be able to scale in the current engine without recoding.

Given the leaps we saw in the Halo series, each game had progressively larger "arenas" and within engine enhancements, but they didn't scrap and redevelop the whole engine or the networking model. Destiny 2 more likely has changes to the presentation of missions, maps and game modes.

Look at the trends in the current game:

1. More story

This is something everyone is clamoring for. Destiny has a superb background, but most people only touch a fraction of it. We've been getting more story, in terms of missions, NPC dialog, and collectables in each expansion, and each expansion has upped the bar.

2. More variation on content:

POE is childs play vs. a raid, but it does represent a system of rotating in mission content. This along with the strike changes to somewhat random enemies and bosses, IB changing modes, and the court of Oryx, indicates an effort to make rerunning activities less repetitive. If we could extend that further, into patrols and public events in Destiny 2, and make the changes more significant each run, it vastly improves the experience.

3. New types of content:

SRL, Doubles, Bungie is starting to put more effort into unique, one off or rare events. We should see more of that in the future since people seem to pretty heavily play the unique modes while they are live.

None of that requires a complete engine overhaul. If anything, it's more of a back end deal with Bungie's support and content development groups.