I believe that they don't and it is a myth perpetuated by Nintendo fans. They are dead last in quality first party games compared to Sony or Microsoft. Why? Their avoidance of Western developers and trends may be to blame. I don't believe they employ one Western developer at all. Sony is a mix of Japanese and Western developers and Microsoft is definitely Western-oriented but they have hired Japanese developers to make Xbox more appealing to Japanese customers.
What's the problem with Nintendo games? Practically all their games are shallow and lacking in depth, story and dialogue tend to be poorly written (not in a grammatical sense but rather they don't captivate at all), often are recycles of previous games like Super Mario games. That's a trend and it is truly amazing that they have managed to hold on all these years despite the appalling lack of quality in their games.
They haven't at all evolved from the 80s. The Wii U is a great example in fact. The OS is so archaic. It makes me wonder what the heck they were thinking when they made the OS for Wii U.
Lastly, take Mario Kart 8, the latest hot-selling Nintendo game, but is it truly deserving of that status? It is definitely not. The game is far too simplistic from the menu, game options and features, the UI, and to the lack of a real progression system. It's not a video game, but a children's toy. That's what Mario Kart 8 is.
Nintendo games are stuck in the 80s, and the Wii was a one-hit wonder that certainly won't happen again.