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zorg1000 said:
I think it has more to do with development time/cost rising to the point where it was no longer feasible to support two platforms at once.
Not only did they go from SD to HD with their home consoles but they also went from 2D to 3D with their handhelds and this caused their outout to significantly decline from DS/Wii to 3DS/Wii U.
If they struggled with supporting a PS3 level console and PSP level handheld than how would manage a PS4 level console and Vita level handheld?

DS was when Nintendo moved to 3D on handhelds. But you do have a point that their Wii U output was significantly decreased due to their AAA games requiring more resources, as well as them not being prepared in the first place.