They had pretty brutal working conditions in the 80s and 90s. A number of suicides/health collapses, etc. It wasnt specific to Nintendo though (Sega was really brutal too). But it gets results. The developers dont need flexibility, what they need is a good kick in the ass and if they dont perform they're fired. Pretty good incentive in a culture where being fired is a source of great shame.
Then give me a source. Give me some data that actually backs up that claim because it just feels like your pulling this out of your ass.