Was Nintendo right to opt out of the graphics arms race?

[PAOerfulone]

Look at where Nintendo is now and compare it to how the rest of the industry is looking? It's looking more and more like they were right all along.

We're beginning to see where the 'graphics' road leads.

As graphics and technology continues to rise, so do the development costs and time. And when the audience you're selling to is not growing and even diminishing in some cases, that leads to returns getting smaller and smaller to the point where you have to find other ways to make that money back or risk taking a loss and putting your business in jeopardy.

Nintendo dropping out of the race may have had some negative effects such as how they miss out on major 3rd party releases on Day One (Something that is starting to change). But you look at what that has led to with the Wii, DS, and now the Switch 1 and Switch 2? How can you argue that it was anything BUT the right move for them? It's worked out beautifully in their favor and it puts them in the EXTREMELY advantageous position of selling their hardware at a profit right from the start or damn close to it. Whereas Sony and Microsoft have to wait years before their systems can turn a profit on hardware sales. In the meantime, they use software and PSN/Xbox Live subscriptions to make it up. Combine that with the rising development costs I mentioned earlier and their audience not growing to match it and those profit margins start to get more and more slim for them. Meanwhile, Nintendo is making more profits than ever before.
And because they've carved out their own niche or audience that specifically buys their product, an audience distinctively different from that on PlayStation, Xbox, and PC - Combined with the rising development costs on those systems and THAT audience not growing to match it - Third parties and even Sony and Microsoft themselves, can't afford to ignore Nintendo any longer. They have to develop with them in mind as well with the intend of releasing and selling on Nintendo hardware.

So it's coming around full circle for Nintendo. Even though it got dicey at times (Wii U/3DS era), they've come out of it very healthy and practically vindicated. It would take an absolute PR and momentum-killing disaster that would put the Xbox One, PS3, and Saturn reveals to shame to shake them from the position they're in now.