To crank out a much larger number they would need to expand their operations substantially. They already ding out a pretty good number when you include partners and subsidiaries. They can't do e everything.

And they are supporting two systems.

Last year you had Donkey Kong, Mario Kart, Smash, Hyrule Warriors, Bayonetta 2, and Captain Toad (pluse a few others I think?) for Wii U.

This year you have Kirby, Mario Party 10, Splatoon, Super Mario Maker, Yoshi, Xenoblade Chronicles X, Fatal Frame V, Devil's Third, Mario Tennis (and Genei Ibunroku #FE in Japan).  Add to that some quality non-partner exclusives like FAST Racing Neo and major DLC like Mario Kart and I would say Nintendo's output is pretty darn respectable.

I think they make too many. I wish they would do less Wii Party style BS and focus more on Zelda caliber projects. Even if it results in overall less games, there would be more high quality ones, and less fillers.

There is just no reason for third parties to ever come back.  Nintendo is too far behind on network infrastructure, and they can do far more on the more powerful PS4.

I remember a interissing quote from myamoto saying that if that there is no point in hiring people if they will not be able to produce nintendo like games. Do you see the that ubisoft expand agressivily in these last years and AC games became so generic, and lost all indentity of the series?

Besides, this would also involve firing a lot of people at every bump that nintendo faces, like how zynga do, and king too.

Quality takes time, and very few companies prioritize this so much as nintendo (at least on the games front).

Again, as i said, this is something that nintendo can fix NEXT gen.For wii u is too late.And while DQ XI isint confirmed and just rumored, it is a good sign that nintendo is trying to fix that problem

Also your OP kinda misses a bigger issues. Nintendo doesn't need more games but need to better use their IP in a more balanced way. Instead if a year heavily weighted towards one genre or character, they need to have more diversity out of the gate. For example, Nintendo has a number of RPG exclusives. They have direct ownership/control over Mother, Paper Mario, Mario and Luigi, Xenoblade, Golden Sun,Fire Emblem, Pokemon, and now Genei Ibunroku #FE (if they want that to be a series). They also have some influence over others like Monster Hunter and Bravely. They should pull out more of those for their next home console.

I just hope they make some new IPs and bring back some older franchises.
Mario, Zelda and Pokémon all make Assassins Creed games look like they are few and far between at this point...

No offense but one niche Japanese game means nothing.  Yes, they could fix it, but that would require a massive overhaul to eveything - this took Sony an entire generation to 100% nail down.

That's not Nintendo employees, the 3000 figure is not up to date. Nintendo has over 5000 employees, and the numbers had been rising for years now:  https://en.wikipedia.org/wiki/Nintendo At worst, 3000+ is the number of pure video game developers which have nothing to do with the hardware or other non-programming related.

It also excludes the developers from their partner studios like Intelligent Systems or HAL Laboratory.

Since when Dragon Quest is niche????You know that, Dragon quest Heroes alone, a spin off, sold more than 1 million in Asia alone!So again, you are very wrong if you think Dragon quest, a mainline game, is niche.And if sony can do it, nintendo can too.Its hard sure, but not impossible