Nintendo, while aggressively litigious, do so to maintain the value and exclusivity of their IP.
Their games also never go on sale, and all sell really well over time, unlike many releases from other publishers.
The result is that Nintendo are able to release a solid cadence of high quality, first party games free of other forms of aggressive monetisation, maintaining the value of the games as art.
I’m no expert, but I think it’s also a quirk of how copyright law works in Japan. Apparently if you don’t consistently restrict other people from using your stuff, you weaken your case when you DO try to stop it.