To add, people also underestimate mobile gaming; westerners still look down on it compared to console and PC gaming, despite the financials telling a whole different story.
In my experience, graphics upgrades feel amazing at first, but if it’s a good game, you mostly forget about it after just a few minutes. But yes, sometimes you have very scenic environments, like in RDR2, but even then I feel like it’s 90% making good composition, color, lighting, and 10% is the actual GPU doing real time lighting etc. At least to me, this obsession with cutting edge graphics is just an expensive hobby of moving goal posts. I’m the same with TVs, I care much more about the movie or show than the TV specs.
Mobile gaming makes money because companies put slot machines into people's pockets. Actual games are a drop in the ocean.
I chose Steam Deck instead of the Switch. Yes the SD is more expensive, but it already supports most of my existing Steam library and I can buy new games on sale.
It seems like Nintendo picked up on what makes video games so fun early on while a lot of studios struggle with it even today: The gameplay comes first and it has to be fun. Art/style comes next, then way down the list is graphics. Graphics are the only thing about a video game that get worse with time. If you focus on making fun games that have a distinct style, they will remain fun forever. Importantly to a corporation, they also remain sellable forever.
Nobody talks about crysis 1 anymore, but people definitely talk about wind waker.
I would argue that they're thriving in spite of it.
Great gameplay and great art/graphics are not mutually exclusive. They're not even going to be handled by the same teams.
And based on unit sales, that strategy seems to be doing pretty well.