They still make a whole lot af amazing games, they just changed target audiences.
Inazuma Eleven, Yokai Watch and Professor Layton are highly rated series with incredible sales.
OT : Could be a bunch of employees spinning off their own studio.
I don't agree. Those franchises forced them to be so iterative, that even games I really enjoyed have been run dead into the dirt. The scale of those games also do not match their previous generations output at all. Ni no Kuni does though, but I'm not sure if we'll see another one of those anytime soon.