Nintendo recently stated that they don’t want to work with “garage developers” (the sort of dev’s you see making games for the iphone/android) because they say they devalue the industry by charging free-$1 and although I do sorta agree with them that those games are CRAP I do understand the market for these cheaper shittier games. See both Sony, and Microsoft have embraced these smaller games, Xbox has it’s Indie platform, while Sony has it’s “Mini’s” which are mostly all ports of Iphone/Android games, but Nintendo hasn’t gone this route in any notable way.
So why hasn’t Nintendo embraced this new form of revenue? Well maybe because they’d rather support a full priced disc full of crap rather than cheap downloadable games that they’ll make less revenue from. Nintendo’s platforms are notorious for shovelware, and just in general lesser quality games, and that’s why this new form of casual gaming is freaking Nintendo out, because these cheap games are a stone toss away from some of the full priced content available on their systems.
Nintendo is definitely less of a culprit of making shovelware than the third party dev’s making content for the Wii/DS but Nitnendo’s overall quality has gone down so sure they’re making games like Mario Galaxy, and Metroid, but than they’re making 2d Mario with two different colored Toad characters because it’s easier than programming 2d dress physics for peach, and their avatar characters “Mii’s” don’t even have god damn limbs or necks! Hell they look like something you’d find on the N64.
Sony, and Microsoft are seeing huge block buster experiences on their consoles, and thus aren’t fearful of “garage developers” like Nintendo is.