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Makes totally sense. When the player characters get tiny on screen it is wise to not rely on the TVs up scaler. Also it might minimize lag by the TV itself.

For most games it simply doesn't matter if they run 720p/60 or 1080p/60 as the players reaction are not that critical as in Smash.

Smash shows that Nintendo chooses hardware that caters their needs. If others - like some big thirds - can't cope with that - no business.

Real creativity is to go around technical limitations.

Nintendo and its own studios really shine in this regard.