I'm a big jrpg fan, and the Xeno games just haven't hooked me.  Retro for me.

They surpassed them with Xenoblade 1 and I like Prime series a lot. A LOT. From Xenoblade to working on Splatoon series and Mario Kart games since then to being responsible for the world design in BoTW. The answer is yes. They are one of Nintendo's most important studios. MP4 could get a meta of 99 and still feel this way.

Nintendo's "elite studio" is Tokyo EPD. (Or the mainline Zelda team, EPD 3)

I think people on this forum throw around the term “elite studio” too casually.
Retro Studios isn’t anywhere close to that. A very long time ago they were a successor studio to Iguana Entertainment. But most of those guys quit like 25 years ago. Since then, they’ve mostly been a small capacity support studio with a revolving door.

Monolithsoft, at the least, is a well established studio with their own IPs, and staff that has earned a lot of fame, some among them with long lasting fanbases. On top of that, they don’t need half their work done by other Nintendo studios and contractors the way Retro does. While Monolithsoft does hire certain outsiders to do work, it’s not because they need help, it’s because of longterm relationships and artistic vision. This is why Tetsuya Takahashi has brought in Mitsuda, Sawano, and Nomura for Xenoblade games; and why Yasuyuke Honne brought in Masato Kato for Baten Kaitos.

Having now played quite a bit of Prime 4, the implication that Retro have lost their touch is off base. It may not rival their very best works, but it's similar in quality to say Donkey Kong Country Returns and not far off Prime 3.

For that matter, it's similar in quality to Monolith's last release, Xenoblade Chronicles 3, so I wouldn't say Monolith have surpassed them just yet, though of course that could change if Monolith's Switch 2 debut is a masterpiece.

Well I've heard good things about Prime 4 so I doubt Retro has lost it's touch.

The game scored comparably with DKC:Tropical Freeze. Definitely haven’t lost their touch, especially seeing the work they did with MPRemastered three years ago.

As I said three years ago Retro still aren't an elite studio, while Prime 4 is a step in the right direction they have a long way to go before they can compare to Monolith who effectively are Nintendo's right hand.

The two have been trading blows for a while really; on Wii Prime 3 and Xenoblade Chronicles were both great but Xenoblade was a bit better, on Wii U Tropical Freeze was better than Xenoblade Chronicles X, and on Switch Xenoblade 2/3 and Prime 4 are pretty similar in quality, but 2 games beats 1.

Disagree, XCX was way more of an achievement than TF, the latter is considered on of the best 2d platformers yes but XCX is also considered among the best open worlds in a competitive era for that space the game as seen with the DE version not only holds up against games today but still does things others haven't. Monolith all the while was also working on BOTW with Nintendo and XBC2 which they achieved with a smaller than usual team in two years, WiiU is when Monolith caught up and over took Retro. Monolith's output also includes AC, MK World, Splatoon etc... they're developing their projects while being instrumental in others.

Retro were ahead back on the Wii due to DKCR and the Prime games but then Monolith had only just been purchased.