I actually think the reason for Nintendo's lack of investment has been due to non gaming related factors such as the very high value of the Yen in recent years. They also suffered quite badly from property losses did they not at the same time the 3DS was struggling in it's initial year.
Nintendo really have their eggs in 1 basket for the most part. They're the last pure gaming company left. They can't rely on other divisions to prop them up and tide them over. I think had they invested loads in additional studios, they may well have killed themselves off in the 3DS launch. A company relying purely on gaming, if they bet the bank all in one go, only needs 1 bad year to wipe them out.
I do think Nintendo have been a bit overly-cautious though. But taking on the likes of Bayonetta 2 is a step in the right direction. They've completed screwed the Wii U launch up. Mine has barely been touched as I realised (having bought them) that Nintendo Land and NSMB:U don't really interest me that much. The latter just being a bit too over familiar now. However I will play the crap out of Pikmin when that comes out. It just really bugs me that the 2 Wii U titles I really wanted at launch, have now both disappeared out to the best part of a year after launch (Rayman Legends and Pikmin 3). I have to say though, Lego City looks incredible so I will be buying that soon!
RIP Dad 25/11/51 - 13/12/13. You will be missed but never forgotten.
