They did. Nintendo released just as many if not more games for the Wii than it did on any of its previous consoles and it did so while also supporting DS which didn't rely so heavily on remakes like GBA did.
Aside from the casual focused "Wii" series of games, what new games has Nintendo released on the Wii or DS in their lifespans? There are the usual assortment of Mario and Zelda and other games of the same franchises Nintendo has been milking for the last 20 years, but where is the new stuff? The GC had Pikmin, so that's something. Pikmin isn't a casual game, yet it is something new. There was Donkey Kong Country and Punch Out which I am thankful for because those franchises haven't seen a new game since the SNES era, so for those games its been so long that sequels were welcomed. But even though their presence was welcomed, they are still sequels and not new core franchises. That's been the problem with Nintendo since the N64 pretty much.
NEW Super Mario Bros.
Excite Truck/bots
Sin & Punishment
Xenoblade, TLS, Pandora, Disaster, Span Smasher, Battalion Wars,
but thats' just off the top of my head
Meanwhile, Sony and Microsoft are pumping out new franchises left and right. Nintendo is more conservative and they focus whatever resources they have on sequels or casual games. There is absolutely nothing else, and the few exciting new core games that do come out are available in Japan only. Like Captain Rainbow and all those other ones. Why can't Wii have those? Wii would like to play, but Nintendo won't put forth the 2 cents worth of effort and bring the games over.
Sony has
Uncharted 1, 2, 3
Ratchet & Clank (& the 1 or 2 sequels)
Resistance 1 & 2
LBP 1 & 2
MS has
Halo 3, Reach, ODST & soon Halo 4 in 2012
Kinect Sports 1 and soon 2 in 2012
Sony and MS are desperately seeking their Mario and Zelda's in this world. And honestly, who wouldn't. Every dev/pub would love to have an established franchise that could do almost no wrong as long as they kept the quality good. So now you're going to fault Nintendo for having and supporting the one thing that everyone else is jealous of?
Wii has practically outsold PS3 and 360 combined
But it used to be that the Wii was outselling the competition (or the PS3 at least) by 5 times as much. Then it dropped to 4 times as much, then 3 times as much. So now you are going to boast that the Wii has sold 2 times as much? And it is still dropping. It may not reach the point where the competition ever overtakes the Wii, but let's face it the Wii is stagnant and pretty much at the end of its rope. The competition is going stronger now than it ever has, and the dominance the Wii had back from its launch to 2009 has faded a lot. I would expect both the PS3 and 360 to start overtaking the Wii in monthly and yearly sales, if they haven't already.
Did you really expect Wii to keep up a record setting pace past the point of near saturation just so that it can say that held it's 5x the competition sales levels? Do you realize how many Wii they would have had to sell at this point? 250 million of them. Yes, a quarter BILLION Wii's would have had to been sold. That's almost double the amount of DS's & PS2's sold in the world. DO you really think anyone is ever gonna reach that number if they don't start pandering to the "people not currently interested in videogames" such as the vast Blue Ocean crowd that eats up quality "casual" wares?
and it did so primarily on the strength of 5 glorified tech demos packaged into one disc. That's like slapping your arch enemy's mother right in the face... with your penis. How did Nintendo not bring its A-game?
Because Nintendo didn't go in for the kill. They won over the casual gamers with a glorified tech demo, as you said, but what did they do to capitalize on that? And what did they do to win over core gamers? That's why I say they didn't bring their A-game.
They slapped the competition in the face with their penis, but the penis was small and flaccid and while it was humiliating at first it was not a death blow to the competition. After the initial shock wore off, Kevin Butler and Bill Gates pointed at the tiny casual penis and laughed. Nintendo had nothing to follow it up with, especially this last year in particular.
They "pointed at the tiny casual penis and laughed" all the way till releasing Kinect and Move in an attempt at being just like Nintendo....?
What did they do to capitalize on it...?
They outsold the competition almost 2:1 combined and made more money than the competition combined lost x4.
*Can you say Record Setting Profits that boosted them up to the #2 Company in Japan*
They followed up with blockbuster sales in games such as NSMB, WiiFit, WSR & WiiPlay and established the Wii____ series of games.
How did they win over core gamers? Are you a core gamer?
Do you own a Wii? SuperMario Galaxy 1 & 2? PunchOut? Excite Trucks/bots? DKCR?
will you be buying Zelda SS? Are you eagerly awaiting an announcement of Xeno and/or TLS & Pandora? Did you happen to invest several dozen/hundred hours into any of those so called "casual" games I listed above?
Nintendo's main fault this generation was the 3rd party falllout, not their own output. Nintendo put out tons of great games this gen, but they couldn't support all the needs of every gamer all by themselves. If 3rd parties are onboard for Wii U, it will be a much different playing field when it comes to available software.