I think I might have the answer: Sony did have this problem, until the PS3 happened. I read that Sony sent out PS2 devkits with Japanese documentation and pretty much said "figure it out."  With the PS3, Sony stared into the void. The PS3 cost billions in losses, and their overall position is that they were going to go bankrupt if they didn't do something immediately. They were humbled by that experience, and it's also why I believe the PS4 is much more conservative (and leverages AMD's acquisition of ATI, and their research into APUs), and doesn't loss lead like previous consoles used to.

Sony has about 5000 other problems.

Did...past tense. And they are the better for it.

NST has never made a good game. Metroid Prime Hunters was just terrible (worst selling Metroid game for a reason) and Nintendo wants to continue that story line for some reason? They should push NST deeper in the grave by ignoring that game exists.

1080 Avalanche was just mediocre compared to the much suprior SSX series. No idea what people see/saw in this studio.

Wasn't it this some similar sort of nonsense that ruined SOCOM 4 and doomed Zipper Interactive? It was a while ago, but I remember reading a few articles about some developer who came out about the whole thing.

Though Sony and most western studios generally do seem to be a bit more open than Japanese studios, from what I hear.

Ridge Racer 64 was a good game. A really good Ridge Racer game. Waverace Bluestorm was a nice game as well. Not as good as the N64 but a good game nevertheless. People in their rush too bash NST and keep Nintendo sitting on its immaculated golden throne forget that it belongs to Nintendo. NST is a 1st party Nintendo developer for Christ sakes! Nothing they do happens without Nintendo supervision and approval. If NST made crappy games then it is due to Nintendo own incompetence for not giving NST the right directions and support for a good final product. The way Nintendo handled this company was a complete disaster. Disaster! Disaster Day of Crisis. Now that's a crappy game! 

Edit: Ridge Racer 64, Waverace Bluestorm, 1080 Avalanche and Metroid Hunters are waaaaaayyyyyyyy better than anything Nintendo showed at this year E3... I mean... Digital Event... or something. No company with such a poor and mediocre showing like that can't say a thing about NST software.

That they are. I guess the other half of my post that I forgot about was has to happen for Nintendo to change. If the Wii U's critical success and commercial failure doesn't convince Nintendo execs' that something is fundamentally wrong with the way they are organized, and do business, nothing will. For Nintendo to go through the same kind of metamorphosis that Sony went through last gen, Nintendo has to lose their safety net, and the people at the top need to be shown the door. The type of infighting between their Japanese and American branches we're seeing and reading about now (7th and 8th gens) worries me greatly. It's the same sort of bad behaviour Sega (5th and 6th gens) suffered that led to them being forced out of the hardware market.

Nintendo is an extremely conservative Japanese company (extremely conservative by Japanese standards). Sony is based in Japan, but Japanese execs don't appear to have that much power in the company while Iwata's inner circle NCL runs Nintendo with a iron fist. You don't really see little things like this in Sony's games because Japanese management doesn't push their weight around like they do at Nintendo. At Sony most games are developed bottom to top in the US or Europe, so there are fewer cultural conflicts. 

Hahaha, I said the same thing!!!!!

Well what we have seen of the game looks like pretty meh, but if we look back to N64 days we can see the type of gems and porfolio diversification that we get when Nintendo leaves a talented western studio to their own devices. I have idea of who these guys were though, I doubt they or this game was a huge loss. Just serves as a reminder that Nintendo should to invest in a few more top tier western studios like Retro/Rare