The Nintendo fan is a consumer, therefore what makes business sense is not at all a priority to them and they are totally in the right for wanting product that appeals to them. To expect us to get excited and buy everything they make is silly. Also, Nintendo is atleast less fixated on max profits than some other companys, proven by their lack of lootboxes and microtransactions... for now atleast. I wouldn't even use Labo and Ring Fit as evidence for this as I think they're clearly fishing for another massive hit like Wii Sports.
Nintendo has always been fairly profit-driven. But not really in a scummy EA or Activision sense (well, for the most part anyway). They prefer to instead maximize profits by offering a steady string of quality games for various audiences, exclusive to premium priced platforms that are sold for profit. It's why they're able to make so much money, even when they don't dabble in the less-than-favorable industry trends. Their business model allows for quality and creativity, while also ensuring tons of revenue generated. It's also why Nintendo rarely puts their games on sale in huge amounts. You buy Nintendo platforms, for Nintendo games, and if those games are devalued too much, then people won't buy them long term. It's best to keep them as fresh in people's minds as possible, so that there will always be a marketable lineup of software built-in. To Nintendo, Super Mario Odyssey is as new now as it was back in 2017, so it makes sense to keep selling at full price if people keep buying a Switch for it.