Rabbitwork said:
op's theory is destroyed by two simple facts:
1. this is a capitalist society; businesses exist to make money
2. the "core gamer" demographic simply does not have the buying power of the "casual market". the numbers simply do not equate (i.e. - 10 casuals buy 5 games in one year, 1 core buys 50/year).
nintendo, like most companies, is not interested in satisfying "the core" market alone. what they are interested in is making a lot of money. to pretend otherwise is laughable.
I agree with the OP, and was thinking much the same myself. To discuss your specific two points;
The reason why the 'casual market' (hate that term) has an increased purchasing power in this generation is because the vast majority of games companies are iterators and not innovators, and this leads to increased homogenity within the market, meaning the number of total 'gamers' is reduced as their interests are not met.
Nintendo are specifically gaming innovators, because this allows them to make the most money with the minimum risk; selling games on a unique and untested mechanic that rely on that mechanic and not on expensive to produce assets such as models / licenced soundtracks / voice overs etc. This is also why Mario appears in so many titles that have absolutely nothing to do with the 'real' mario games (Mario Tennis, Mario Party, Mario Kart) etc - they have a recognisable IP that they can leverage for initial interest, and a bunch of stock assets (the standard Mario [x] crew of DK, Yoshi, Luigi etc) they can quickly implement onto an experimental game.
If the new 'genre type' is successful, then Nintendo can reap a lot of financial reward from it, and can usually get a couple of sequels in before the 'bigger boys' jump in with more expensive variants of the game - when this starts happening Nintendo have usually jumped ship to something else. Very few Nintendo franchises are still around as 'best of genre' examples - pretty much just 'real' Mario games and the Zelda series, where nobody else has yet managed to outdo them on both gameplay and production values.
The reason why the 'core' demographic is inevitably shrinking, is because when a genre has matured, it has iterated enough so that certain things are 'always expected' within that genre to be successful; if you think of FPSs, regenrating health is now a de facto standard, and the amount of money invested by a big name publisher into a 'best of genre' game to compete with the other 'big boys' means risk taking is usually avoided.
The downside of that however, is that consumers increasingly become turned away as the 'de facto standards' don't necessarily directly appeal to them - or that they become bored of the same mechanics across multiple examples of a genre. If you really love FPSes, but you cannot stand regenrating health, then there are fewer and fewer FPSes that are available that you will actually like. Eventually you will just give up gaming, because the genres you love become more and more niche to satisfy the unspoken 'de facto standards'.
It is
incredibly telling that much of the Wiis success is not built on 'waggle casual games' as the popular opinion has it, but on 'lapsed core gamer' titles such as Mario Kart or New Super Mario Bros Wii. These aren't games that are designed to appeal specifically to people who've never played games before, they are designed to appeal to people who probably gave up gaming a while ago because they no longer had titles that appealed to them being released.
New Super Mario Bros Wii in particular is almost certainly reaping the rewards of 'lapsed gamers' that stopped gaming when the 3D generations began, as fewer and fewer 2D titles were released - in the SNES days 2D platform games were
incredibly popular and I don't think it is a huge leap of logic to deduce that people who really loved 2D platformers were not well served by the generational leap to 3D.