I sorta see Nintendo's success as sort of a reflection on why Japanese gaming as been making a comeback in recent years.
It's funny, as a little over a decade ago, Japanese gaming was quickly being left behind by all the new experiences being brought about by Western developers thanks to the power of the HD console generation, and simple, colorful experiences were seen as "outdated", with tons of games from Japan not selling as well or getting as much hype as the cinematic blockbusters that were enthralling critics and players. Even Nintendo, although the Wii was a big success, was mocked for not trying to go that route (and when they did enter HD development with the Wii IU, it failed horrendously). Hacks like Keiji Inafune were calling Japan's gaming industry "over" and that they needed to Westernize or die, leading to many of the ill-advised reboots of their properties and such.
Fast forward to now, and Japan, while not quite as prolific as during the 5th and 6th console generations, are now back to creating games that are beloved all over the world, and are even getting a much warmer reception from critics and fans. Just look at how the Switch, while not very powerful or giving the most cutting-edge visuals, is still selling gangbusters.
Meanwhile, the formerly dominant Western gaming industry, while still raking in billions every year, are now being lambasted for over focusing on visuals and cinematic spectacle over trying to create anything fun. That may have been enough a few console generations ago, but with graphical progress slowing down with every passing month, it doesn't cut the mustard anymore. Not helped by the money-grubbing the publishers like to do in order to keep those investors happy, because they have sunk too much into this area to back out. Basically, they're doubling down on it rather than adapting or going back to the drawing board. Ironically, the Japanese company that is arguably the most maligned nowadays, Konami, is doing very similar antics to the likes of EA and Activision.
The Western Triple A gaming scene has just become too bloated and risk-adverse, and people are looking for fresh and fun experiences, not ones that are only focused on cutting-edge graphics and monetization out the wazoo.