Yea, they bowed out of the traditional console race after the GameCube.
Well, i think Nintendo has always approached gaming as an extension of its generationally deep entertainment mission. Their mission statement:
Nintendo's mission is to put smiles on the faces of everyone we touch. We do so by creating new surprises for people across the world to enjoy together. We've forged our own path since 1889, when we began making hanafuda playing cards in Kyoto, Japan. Today, we’re fortunate to be able to share our characters, ideas and worlds through the medium of video games and the entertainment industry.
I think it is a great approach to avoid obsolence. If Ford truly viewed itself as a transportation company in the 1890s, rather than an automobile company, they might be as big as Ford + Boeing + Harley Davidson + Uber + Tesla. The commitment to gaming entertainment, has allowed them to make mistakes and not viewed as true failures or that their business is at risk.
Game and Watch predates Famicom. So, transitioning to mobile and hybrid actually makes more sense with their core business model and history.