I get investing in new avenues to keep a business fresh but what I don't understand is this constant funneling of money out of things that are clearly working for get rich quick schemes. It's like these people read investment journals and don't actually understand their own industry.
Let's flip this around. Handheld is obviously working. Handheld is working fabulously well; MH is a property second only to Pokemon and it did it on the second-place PSP.
So where do you put the money from that?
Do you funnel it back into MH? Where do you put it in MH? Your current team is obviously the best of the best, so probably not into staffing. More assets? MH is notoriously asset-light, a factor that the playerbase seems not to mind or even appreciates as it lets them learn what's there very well; you could say that going asset-heavy with an MH title would be about as useful as modeling outside the stadium in Madden and then allowing play there. A lower MSRP to increase volume? MH's greatest hits editions already sell extremely well, there's no need to push the initial price down since the games are still active a year later. A yearly cadence, when the off-year greatest hits editions already sell with no added content?
Do you chase Pokemon? First of all, do you have the confidence that young kids will appreciate the design works and gameplay systems enough to make it worthwhile? Do you invest all four billion yen in a year or so's TV run of a cartoon (at 10-20 million to produce and then 60-80 million an episode to broadcast nationwide), something your current fanbase is even less likely to appreciate?
If you're not pumping it back into MH, you have three main choices (unless you go the Sony route and make all your money by putting your cash cushion into real estate and stock market investments):
1) Console gaming.
The console market has shrunk heavily in Japan since its peak in the SNES days. At this point your opportunities lie mainly overseas, where your title will be:
a) An RE6-style, AAAA extravaganza that requires all the investment of a Gears or a CoD in order to compete for the "ooh, that looks shiny" mass-market, yet will inevitably not sell as well because it's launching without system-seller-exclusive hype or an active multiplayer ecosystem of millions.
b) A God Hand or Okami-like AA title that, whether or not the reviewers get it, will be written off by the mass market as "Japan jank", "unintuitive", and "HD is hard". Past performance suggests that this is at best a coinflip between "total bomb" and "core fans love it - barely profitable", with no chance for "breakout hit".
2) Handheld gaming.
What do you make?
Do you make a traditional RPG? Why are you making a traditional RPG on handheld, with higher development and distribution costs, when you can make one on mobile without quality loss?
Do you make a 3D action game? It's the one popular genre that really benefits from a handheld's dedicated controls and reliable performance. But why are you making a 3D action game when you already have the genre king 3D action game?
Do you make a rhythm game? Why are you making a rhythm game on handheld when the gameplay is just as good on mobile and the game systems are perfect for selling songs one by one?
What other genres are reliable winners on handheld?
3) Mobile gaming.
It's booming hugely, and \4bn is enough to make you a major player in the ecosystem (whereas it might pay for the entire worldwide release of one handheld game, or the development-but not the advertisement, physical production, or worldwide release-of a console game).
In summary, the things that are "clearly working" are either not actually working, or working so well that more money would not help. So the next step is to put serious effort into adjusting to the new major platform, just like worked last gen when it was the X360/PC easily-portable duo.