The OP is a big Arlo fan I see. Anyway, I was there on this very forum back in those days. It was bad and everyone knew it. While 3rd party titles picked up in 2009 and 2010 I felt the Nintendo support was declining.
The reason for the decline is that Nintendo consoles need an amazing start. So Nintendo just throws everything at launch year to make sure such a thing happens. This is a good strategy as it gives 3rd parties a chance to pick up support later on. They have been using this strategy since NES. However, a Nintendo console suffers greatly later on because instead of Nintendo continuing that support they have to move on to the next console. After 2008 Nintendo had to shift gears to the 3DS which was announced in 2010. That's why the Wii slowed down a lot later on. It had nothing to do with "teh casuals"!
There is not much to learn here because Nintendo is already learning from this. Why do you think the Switch exists? To prevent the dreaded 2nd half that every Nintendo consoles seem to suffer (1st party wise). The Switch won't have a sucky 2nd half since its successor won't release until at least 2023.
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