They may like Candy Crush for free, but as we've seen many times before, they will Buy games when there is value.
Which games will they buy?
Which console casual games have taken off as huge hits in the last 3-4 years?
What you think is "value" is not the same to a casual player, they want simple games that they can get good at and occupy some of their time.
You're trying to sell a $60 three course dinner to a person who just wants a $6 hamburger and some fries. It doesn't matter how good your $60 dinner is quality wise, sometimes a person just wants a freaking hamburger and fries and nothing else.
Smartphones and tablets have dramatically changed the game, there is no need for Nintendo anymore, casuals are overserved (actually) nowadays at a price point Nintendo can't come close to. Mario is nice, but he's not enough.
If the iPhone and smartphone app infastructure existed as the same way in 2006, IMO the Wii and Wii Sports wouldn't have taken off in nearly the same way, IMO. There was a need for Wii Sports in 2006, because there was no one serving the market for people who wanted to play simple games back then.
But today that barrier has been completely removed and casuals have choices that are far more appealling to them than the business model Nintendo is trying to offer ($200-$300 systems + $40-$60 games).