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S.T.A.G.E. said:

Nintendo barely has any real competition from handheld competition. They've enjoyed almost exclusive domination and thats the only way they've ever stayed ontop of anyone. The demand for Nintendo handhelds is bigger than their consoles which have always played second fiddle. Nintendos third party is intact and mostly Japanese because again the Japanese havent enjoyed staying behind and making the same games. To most Japanese devs pushing tech to get newer experiences isn't the most important thing. Its not really about Nintendos strategy its just a lack of competition with compelling games.

You were talking about knowing better, as if giving in to performance demands was the "right' thing for some reason. The market is asking for something that simply is unreasonable, and the Nintendo and the old playstation strategy has always proven that wrong, 7th gen is the only exception because both Sony and MS pushed for more, in line with 3rd parties.

It's only a matter of competition when the competition forces the hand of the market in a direction that itself cannot sustain. As such it will be "knowing better" until the whole thing collapses on itself.

If you're not in it to make money, you're bound to lose it. Simple mathematics and economics.