C) The profitability of these games are reliant on a unsustainable pattern, or by itself contributes negatively to sustained profit. Say you were a knockoff manufacturer for expensive watches, and you were for some reason able to get your goods into the official distribution channel for real watches - this is an extremely profitable situation for you. Then everyone figures out how you're making money hand over fist and starts doing it too, and soon consumer confidence in the quality of the watches drops through the floor, and nobody (real or knockoff) makes any money. This is a very real possibility Nintendo faces. The profitability of shovelware relies on consumer confidence of products in the channel in general, and the market has a definite carrying capacity for shit games - exceeding this risks the viability of the platform entirely.
C) The profitability of these games are reliant on a unsustainable pattern, or by itself contributes negatively to sustained profit. Say you were a knockoff manufacturer for expensive watches, and you were for some reason able to get your goods into the official distribution channel for real watches - this is an extremely profitable situation for you. Then everyone figures out how you're making money hand over fist and starts doing it too, and soon consumer confidence in the quality of the watches drops through the floor, and nobody (real or knockoff) makes any money. This is a very real possibility Nintendo faces. The profitability of shovelware relies on consumer confidence of products in the channel in general, and the market has a definite carrying capacity for shit games - exceeding this risks the viability of the platform entirely.