Seems to be odd but with the exception of a few choice franchises with very established fanbases -- Mario and LEGO not much is taking off in this product categorey. And it's not just Nintendo being hit, Sony and Ubi Soft are getting hit too. The Wonderful 101, Rayman Legends, Puppeteer, Little Big Planet Karting, Little Big Planet (Vita), Tearaway, were all relative flops and some of these are genuinely great games.
Meanwhile things like Angry Birds, Plants Vs. Zombies, Candy Crush, whatever are huge hits on smart devices.
I think there's a cannibalization in sales going on here where people (kids included) view smart devices as their go to for cartoony games. In fact the smart device business is dominated by colorful/cartoony experiences, things like Real Racing and Infinity Blade are kind of a secondary type product.
The home console has become more focused towards realistic looking games for big screen TV play (ie: the GTAs, Titanfalls, FIFAs, BioShocks of the world), so is it really a shocker that the Wii U, which focuses on a lot of cartoony style games is struggling whereas the PS4 isn't even though really the PS4's library (so far) isn't anything to write home about.
It's not just the casual market smartphones are taking over, I think they are dramatically impacting the market for kids/or more cartoony centric software. There's Skylanders I guess, but even that is now a few years old. Not much else is booming in this segment, except on phones its booming like crazy.
