If true, this could be a big win for Google, while helping to boost Ninento's flagging sales.
Some games consoles have previously been built using Google's OS, but none from a company nearly as high-profile as Nintendo, one of the oldest video game companies still in business.
Nintendo owns some of the most iconic properties in gaming, from Mario to Zelda to Metroid. But it has also struggled with lacklustre sales of its most recent console, the Wii U. In January 2015, lifetime sales sat around 9.2 million units, while its predecessor - the Wii - sold around 70 million units in the same timeframe during its lifecycle.
This Android rumour has not been confirmed, but it does make sense considering Nintendo's partnership with mobile games company DeNA, announced in March, to produce games for smartphones and tablets. An Android-operating system would make it possible to play these games on the console too.
Right now, details on Nintendo's next console are sparse. There's no official name or release date yet (it's codenamed the NX), and the Wii U came out less than 4 years ago. (For reference, there was a 6-year-gap between the release of the Wii and the Wii U). So we shouldn't expect an Android-powered console any time in the coming months.
As well as being a success for Google, the move might help revive Nintendo's fortunes. Because in recent generations, Nintendo's consoles haven't been nearly as powerful as Microsoft's and Sony's, it means that it's extremely difficult for developers to produce cross-platform games that can run on Nintendo's machines. As a result, many of the most popular titles never make their way to the Japanese company's platform.
But using Android would make it far easier for developers, given the popularity of the OS. The "operating system is loaded with Android... [and] this would be able to speed up getting all game developers on board," an insider told Nikkei.
Android is designed primarily as a mobile operating system for handheld devices. But it has been used by other companies to power video games consoles. For example, California-based technology company Nvidia recently released the Nvidia Shield, a relatively powerful Android-powered console.
Business Insider has reached out to Nintendo for comment.