The fact that it's sold well over a million copies shows there's interest in the product. I'll admit I and many others, over-hyped it a bit. But It's important to realize that Labo's much more niche than something like Brain Age, or Wii Sports, or even Nintendogs. It's large, fairly expensive, and requires a lot of free time and creativity to leverage. It's not for everyone, and has a very different sales expectation to it than any other first party game on the system, which Nintendo themselves has acknowledged multiple times. That's why even at just 1 million fy sales, they're still going to keep rolling with it with new kits and events.
You seem to want to believe this delusion that the Switch is strictly a hardcore gamer console that only the l33t hardcore gamers play, with the filthy casuals banished to smartphones. The reality is, that's not the case. The gaming industry's not as linear and one-dimensional as you like to make it appear. Audiences from different markets can cross over, and Nintendo is going to be focusing on that. You can ignore all the data I brought up from Nintendo themselves in their reports, but facts are facts.
It has a million only because retailers over-ordered them thinking Nintendo was pushing a hit. My Best Buy has a pile of unsold boxes sitting there collecting dust, I believe the original shipment in Japan hasn't even sold through yet.
You overhyped it a "bit"? You were comparing it to a game franchise that sold like 25-30 million copies, lol. You whiffed on that big time dude.
I'm not saying Nintendo's audience is HARDCORE BLOOD TITS GUNS audience, it has evolved past 2007 to something new itself, it's a majority adult massive legion of people that have grown up with Nintendo in the 80s, 90s, 2000s, 2010s. We're now nearly in 2020. The amount of people who are Nintendo fans today is monstrous, and they're not little kids that need to rely on mommy/daddy to buy them every game.
The whole "Nintendo is for babyiez you shouldn't like it becuz your 25 dooood" stigma is over, today's generation doesn't really think like that. Like I said it's the same thing that happened in comics, once upon a time Spider-Man, Captain America were "kids shit" that you were supposed to grow out of. Today it's a multi-billion dollar business driven largely by adults.
Time's change. Nintendo today has an audience behind it where they can be just Nintendo and not have to be a dancing monkey for casuals that don't really care much for games. They can be themselves today and not be locked into a tiny 20-30 million audience, today it's 100+ million.