Well. If you look at it from a business angle it clearly worked — Nintendo is quite successful, both in hardware and software sales. It is highly speculative, but would they have followed the power race, they would've struggled to stand out. So yeah, in that regard it was good.

Was it good for the players? Depends on the player I think. A lot opted out of Nintendo, you have a lot of Nintendo kids who now play Playstation. But on the other hand a lot of players are strongly into the Nintendo ecosystem. As they opted out competing over graphics, they needed gameplay ideas to stay on top. So yeah, depending on your preferences in gaming it might differ.

Nintendo only ever had one winning console where graphics were the major push: SNES. And two losing consoles: N64 and Gamecube.

However, when they aim for other purposes other than having the top graphics, they nearly always make more interesting and more popular products. With this strategy, they’ve only had one loser (Wii U), and 8 winners : NES, GB, GBA, DS, 3DS, Wii, Switch, with Switch 2 currently smashing and extending records.

Yes, there were a few times over the decades where I felt like I wouldn't mind having even better graphics on this game or that game, but the fun factor has always been there and that is the most important thing in video games.

Business wise yes, but they also lost some gamers...

The Wii gamble was made primarily because they were facing extinction in the home console market. Without it, they probably wouldn't be here anymore. It allowed them to stay in the game, no pun intended, for another two generations before finally bowing out and going handheld-only. But still. Again. They were dealing with going out of business when they went blue ocean. It was their only option at the time, and it was a sound decision.

And even that wasn't much to write home about. In the US, the Genesis was the best selling console until very late in '94. So even with all those colors and mode-7 and sampled sound, the SNES played second-fiddle for most of that generation in a lot of western regions.

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.

The thing is ps4 games look great, thus S2 games look great. Add in games are scalable as crap these days, plus AI data centers increasing hardware prices. If there was ever a time to be conservative on graphical power, today is the day.

Depends from system to system really, but in broad terms yes.

DS was the right call, as having a less powerful graphics chipset might have cost them Monster Hunter and a couple of other PSP titles, but it probably would have only given them a couple of million extra system sales.

Wii on balance was the right decision, though perhaps more by luck than design given that Nintendo probably hadn’t banked on the PS2 lasting so long and thus helping the Wii along as well. Had Nintendo combined motion controls with something nearer the 360/PS3 in graphics terms, the system would probably have held up better later on in the generation.

3DS was another one where it was the right call, as it didn’t need the extra power to beat the Vita, and would have achieved little beyond giving the system much worse battery life for not enough return.

Wii U was the one case where the strategy just completely bombed, although even there the problem was more because it combined a lack of power with a system architecture that was just absolute garbage in every regard; if it had at least been possible to quickly port PS4 and Xbox One games over then I think developers would have done so.

Switch and Switch 2, they basically did as well as they could have done without it turning into a repeat of the Sega Nomad, eg something that barely qualified as handheld and had terrible battery life. And it’s hard to argue with the sales they’ve had.

It's just a joke, "bleeding edge" as in "bleeding edge graphics".