A union can force better working conditions and an appropriate price increase for their products can make that sustainable - if it's even really needed, tbh Nintendo isn't shy about pricing games pretty high when you take into account all the re-releases of titles they do.
"The Nintendo 3DS was released in 2011 and immediately stalled, burdened by the lack of a compelling launch line-up, the rise of smartphones, and a $249.99 price point. Nintendo was forced to move aggressively, slashing the system's price and rolling out special benefits for existing owners. A year later, Nintendo released the Wii U, which fared even worse."
Contractors aren't, by definition, any better or worse than full time employees. But when the going gets rough and the gruel is thin the good contractors will all immediately jump ship because, well, they're contractors - that will reinforce the concentration of lower skilled employees at your company and hurt overall morale.
Lastly, treating your coworkers like dirt will get them to give you the bare minimum to avoid being laid off and, if they're contractors anyways, that might not be any real threat - they can move back into the video game job market with the biggest most legendary game studio ever on their resume.
Sometimes Nintendo products don't strike a chord. It happens to any company with history in video gaming, including Sony and Microsoft.
Underlying problem is that Nintendo has a non-viable business model combined with a culture that tolerates things like rigid work hours and low pay. They can't make life better for employees because their business model sucks.
The correct thing is to simply not work for them.