Most likely this is what has happened:
Nintendo was offering cheap disk and packaging to third parties while their facilities weren't being overly used. Now that Nintendo is ramping up games like Mario Galaxy, Wii Sports, Wii fit, Smash Bros etc. Nintendo has upped the cost to cover extra expenses such as building another production line or borrowing the use of one. Midway most likely did not want to pay the higher fee's so they started complaining about Nintendo's production issue's.
Nintendo has a highly efficient facility. They are very automated, Nintendo had issue's last year getting enough copies of Zelda out the door to retailers and some 3rd party software was delayed to make enough copies of Zelda. These facilities would offer extremely cheap production costs to third parties. If you're used to paying 2$ per disk + package and Nintendo ups that cost to 4$, you are going to be a little miffed, especially if your software doesn't justify the printing costs such as these crappy Midway games.
Prepare for termination! It is the only logical thing to do, for I am only loyal to Megatron.
