It seems to me like they bought all these game studios/companies and just assumed that would get the cash rolling, without realizing that those studious still have to continue to make games and other products in order for any money to be made. That’s like buying a flock of chickens so you can make profit on their eggs, without realizing you have to feed them in order for them to actually lay eggs.
The additional problem is that these western studios are prone to be overstaffed and with diversity hires as well, as meritocracy has long become a foreign concept in the West. It's why western games, especially the AAA kind, suck so bad and often have terrible launches too.
It's just bleeding money at this point but I don't doubt suits can find ways to turn around between money laudering, EGS score, etc. even if it's only effective on the short-term.
By comparison Nintendo prefers to acquire individual talents from other game studios and assign them to one of their internal teams. To name a couple of examples:
Tetsuya Kobayashi (Production Manager Sonic Unleashed - Mario Kart 8: Deluxe Course Design)
Ryoichi Yamagishi (Field artist Sonic Generations - Course Design Mario Kart 8: Deluxe)
Makoto Yonezu (Lead field artist on Sonic Unleashed - Planet designer on Galaxy 2 - lead landscape artist on Zelda BOTW)
Keihan Fujii (Field artist Sonic Unleashed - Landscape Modeling Zelda BOTW)
Daisuke Amakawa (Field artist on Sonic Unleashed - Character modeling for Zelda BOTW)
Hideaki Hakozaki (Field artist on Sonic Unleashed - Producer Xenoblade Chronicles X)
Masahiro Ukai (Programmer Sonic Generations - Programmer Xenoblade Chronicles 2)
Takayuki Satou (Team Silent artist, main CGI animator who worked on Luigi's Mansion 3)
Masashi Tsubuyama (Team Silent designer, now works at Kirby games)
Daisuke Mizuma & Hideki Kinoshita (Gravity Rush programmers, now both work at Monolith and participated in Xenoblade 3)
Yoichi Akizuki (Bloodborne's lead environment, now works at Monolith too)
There is a meme in Japan that whenever a japanese studio implodes or dies, people just end up working at Nintendo. This was especially true when Sony Interactive Entairnement (SIE) shut down Japan Studio and around 40 talents were later hired by Monolith/Nintendo. Add the good pay & bonuses, prestige and, most importantly, people want to work here on games that are appreciated by their peers.
There was a recent japanese article mentioning Nintendo has a retention rate of 98.8%.
That's why other Japanese publishers had to do big salary increases across the board last year, in order keep their employees in but also to attract the new blood straight out of school. The death of Playstation in Japan also resulted in young developers spending the last decade playing on Nintendo systems + PC/Steam. Xbox still remains the underdog there though in spite I've seen some attempts of marketing.