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Does he need a break? Should Nintendo stop making games for the 2 best selling platforming series, AND the best selling racing franchise, all at the same time?

Obviously no.

3D mario sees 1 game a generation, 2 this time
2D mario has recently come back after a huge break
Mario kart, every console gets 1
Mario Party had 8 games over the N64 and GC, the Wii has had 2 I think. It was being overdone, not any more

The thing people never seem to realise is, Mario is not a franchise, in the same sense that, say, Final Fantasy is a franchise. Mario was designed to be a generic character - one who could be put into any game to allow developers to focus on gameplay.