This whole situation and the recent history of Nintendo just reminds me of the whole story with Square way back in the N64 days.
"At that time, Square was really close to Nintendo — we were basically like a second party for them. So when their new system was in development, we gave them lots of advice, like, “You’re going to need a CD-ROM drive for it,” “You don’t have enough bandwidth to do what we’re trying to do,” and, “With what you have now, we’re not going to be able to make an RPG.” We gave them lots of advice. But [Nintendo president] Yamauchi-san at Nintendo basically refused to listen to any of it. And that’s when Sakaguchi-san and the management team at Square decided, “OK, we’re going to go with Sony now.”
When we made the decision to go with Sony, for about 10 years we basically weren’t allowed into Nintendo’s offices. From a consumer’s point of view, it was good to have two companies competing with each other because prices wouldn’t rise and it would be better for them. But from a business perspective, our main interest was making sure that Sony won and Nintendo lost, basically, because that would be better for us."
This was as told by Square's CEO. In that 10 year period Sony went on to sell like 260 million home consoles and Nintendo only like 55 million. So when I see the "they have different priorities" it just harks back to moments like this and many others with 3rd party developers. The almost our way or the highway and sometimes extreme pettiness that Nintendo shows has been like multiple bullets to the foot for almost 2 decades. They went from Kings to Jesters.