It's very clear to me : change of demographics. The N64 still mantained some of the NES and SNES demographics a thus Ocarina was a huge success in Japan. After that the Nintendo fanbase has been changing considerably, and you could say japanese Nintendo fanbase changed even more. It may be that during the PlayStation 10 years of dominance and the following portable uprising in Japan, the Zelda brand lost much of its strength and appeal. Fanbase got dispersed and not as many new Zelda fans came from the post-Ocarina era. Right now the Wii doubles the PS3 installed-base in Japan and then some, but the demographics are not what they used to be during the 16-bit/32 bit era transition. It's very known Nintendo newfound success with the Wii was in attracting lots of consumers that weren't part of their old fanbase (or any fanbase at all), so it's just logical some games wouldn't appeal to them. And it happens Zelda is one of them.
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