I agree with the OP only partially. While I agree, Nintendo should put more effort cerating new IPs, instead of sustaining old ones, I think they should also try to modify and modernize their classic IPs trough the years, innovation is always good, if well tought, and not every new concept can stand on it's own feet.
I think many of the examples shown are weak, many these cases could be explained in a different way.
Mario Kart: the 2 characters kart machanism of Double Dash, is more of an add-on than a true innovation imo, if you look at Mario Kart Wii, it's the fist one to introduce muliple control schemes (including motion controls), it had a strong online multiplayer mode (since MK added an effective online mode, sales have more than doubled http://www.vgchartz.com/worldtotals.php?name=mario (funk! add plus there) kart&publisher=&console=&genre=&minSales=0&results=50&sort=Total ) also, they have introduced motorbikes, they have doubled the number of opponents in races. It seems to me much more innovative game than Double Dash.
Zelda: It's hard to confront Twilight Princess with Phantom Hourglass. TP was a launch game of a console, actually the only really good game you could buy on Wii's launch, and I think Wii was very hyped before launch. Another thing, the TP game itself was very hyped, it was shown many times at E3 conferences, and I remeber it was awaited as the spiritual successor of Ocarina Of Time...what I mean is simply that Nintendo had put more effort promoting that game, while Phantom Hourglass and Spirit Tracks were kept more low-profile. Last thing, if you look at the Zelda IP historical sales you can clearly see it's less popular on handled consoles. http://www.vgchartz.com/worldtotals.php?name=zelda&publisher=&console=&genre=&minSales=0&results=50&sort=Total
Mario 3D: While I agree Nintendo could have created a brand new non-Mario IP out of sunshine, I don't think innovation is the reason why it hasn't sold so well.It didn't sell so much simply because it was the weakest 3D Mario game, smiply it wasn't as fun and well-refined as the others (I think only a minority would agrue with that). Also, following the OP argument, Mario 64 should be the least sold 3D mario game, since it is without doubt the most innovative game out of those. Not to mention that Gamecube had the smallest userbase to begin with. Last, looking at New Super Mario Bros and Mario Galaxy sales I don't see how the IP image went damaged by Sunshine.
Super Smash Bros: Increasing sales could be simply explained by the quality gap between SSB (N64) ans SSB Melee, and by the larger user-base in the case of SSB Brawl. How does innovation have to do with that? If there isn't an example of the SSB franchise using a different formula you can't prove your point.
I agree with Yoshi's Island, Wario Land and Other M examples, I can't talk about Fire Emblem since I don't know the game well enough.
