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

[BraLoD]

As a business, of course.

Nintendo can produce games for cheaper and make people to pay full price on their games, because if you bought their device you were very likely getting it because of their games.

They also found a really unexpected success with indies outside PC, after the PS4 was becoming the place for indies for a while it transitioned to the Switch, people were already more acceptable to smaller scale games because their were not getting those big budget games there, and indies fell like a glove to compliment their Nintendo games library, they were cheaper too so no problem if you were spending a lot of money on those Nintendo games, in the end you would have a lot of games to play as well. Also, they moved to the Switch, which is a handheld, people were already ok with that coming from the 3DS too, people on handhelds always expected less spectacle than the huge stuff coming to home consoles.

Nintendo was NOT always like that, older people know how the Nintendo fanbased used to compare to the Mega Drive for example, as the stronger console back then. Nintendo was clearly trying to be the place to get all the games with as much power as they could deliver up until the Gamecube, their games were not smaller budget games compared to the rest of the industry before that, it was not a decision based in insight, it was a decision based on need, their were driven out of their original goal to main a home console for bigger games and a handheld for smaller ones.

Regarding me personally, Nintendo has become a secondary device, mostly only for Nintendo games. I usually have like 15 to 30 physical games there, and everything else on Playstation, which ends up between 90 to 100 physical games, plus all the digital smaller games and indies I end up buying, so at least to me, being the "place to play it all" Playstation is (or Xbox or PC for other people), is still, by far, the strategy that works the most, but I'm not a representative for gaming as a whole, clearly.