Kinda sad but I think the console business has changed these days. 

Aside from a small handful of IP -- Skylanders, Minecraft, and a few established Nintendo IP (Mario, Pokemon) it seems like any console game that dares to be colorful or cartoony ends up not doing well. 

It's not just a Nintendo issue either, seems like Sunset Overdrive did below expectations for MS. Tearaway, LBP Karting, Puppeteer all underperformed for Sony. Rayman Legends overall didn't do great despite being a terrific game. Sadly I don't think Splatoon will take off in this environment either. While Mario and Pokemon do well some of their other IP seems to be a tough sell these days ... Kid Icarus deserved more sales, Pikmin does too, DKC: Tropical Freeze really underperformed. 

Colorful/cartoony games are doing well, but it's all on smartphone/tablet, where they dominate. Perhaps people are just getting their fill of those games there and the console is becoming reserved for big, Hollywood movie-like, shooters and action games along with sports and racing sims. 

In most cases its just the marketing that sucks.

So.. MK8, Smash Bros, 3d world, Zelda U are games that don't/won't sell?

Those are all pretty established Nintendo IPs. Think he's talking newer IPs. 

OT: While marketing is an issue. A lot of these games get put out at literally the worst times. Look at Rayman Origins when it launched in I believe 2011. It went up against games like Halo, Uncharted, Assassins Creed Brotherhood, Saints Row 3, and a few others. 

Now look at something like Sunset, which while didn't sell gangbusters did decently for a new IP. MCC launched like 2 weeks later, plus you have CoD, Ass Creed, GTA, and a lot of others. 

You made some good points... but I honestly wouldn't blame it on the colorful style.

I'd blame it on the marketing mostly.

I'm talking about things that aren't 20-30 year old Nintendo IP that have well established fanbases. Even there, the market is showing they won't support a console just with those games anymore. Nintendo's console is largely supported by colorful mascot IP, and it's by far the worst selling home console. 

Borderlands, LBP, Mario, and the slew of successful indie games out there (Like no man's sky) all say hi. There are simply fewer cartoony games out there because modern hardware can do more realistic styles effectively.

People also as a rule don't wear much in the way of colour either, even with cars few have bright colours

Society as a whole is drab

Muted colours overall are percived to be mature/serious, which I think a lot of people aspire too 

Until Youkai Watch gets its console port.

It's a shame, Sunset Overdrive is an awesome game. I thought for sure it would sell well.

One of the things I love about the game is the colorful art style.