Spending as much as possible on a single game that may or may not be big has never really been Nintendo's thing, even in the 80s and 90s. Their philosophy has always to spend only as much as necessary to make a great game. This was much easier to do back in the day as Development costs for big titles was much lower than now.
BotW is their most expensive production yet. But it only costed so much to make because it was a deconstruction of a long running series that needed the extra resources to make all those changes work. The model of throwing tens of millions of dollars into bleeding-edge graphics, highly detailed Stories, and fancy set-pieces was a trend started by Sony, and Microsoft followed suit with varrying results.
Per the bolded, Sony may have taken it to the next level, but it was Nintendo who lay the groundwork for such by releasing games that were more so experiences (such as Super Metroid), when eventually Nintendo no longer saw it as financially prudent to follow that design philosophy to its natural course in the evolution of the medium that would've necessitated continual increasing financial backing to maintain it. Many early Nintendo games utilized a groundwork conducive to the types of experiences that Sony and MS now offer. To use your example, bringing Zelda into what gamers have come to expect from contemporary open world gaming perfectly exemplifies and is indicative of a formula conducive to (and I'd argue that would eventually necessitate) vast expenditures long before Sony or MS ever entered the picture.
Nintendo laid that foundation decades ago. Then, as the industry evolved over the years, technology improved, developmental costs rose, and they began to view their previous games in their design as untenable when brought into current day and something to be seen as an exception. It feels like Nintendo only does their massive releases, the games that've defined them and people have come to love them for, simply because they are beholden to a legacy they built and embraced on a design philosophy that, at the time, was much more tenable, yet they've now come to reject and view as imprudent and unsustainable to their business model due to how the industry has grown. Yet the IP is popular enough to offset this financial risk, so they go ahead.
I believe they've come to fundamentally disagree with designing games as they used to such as Zelda, Metroid, or any other property that would be a large endevour and time investment, a philosophy that once was sustainable in the old days but that has now turned into a liability. And unfortunately for them, it is these types of games that people consider IPs that "
count", which also unfortunately, people measure up against the best of Sony and MS, who aren't so reticent to throw the bank at their offerings.
Nintendo's the only one of the 3 that still designs games with an arcade-style design mentality. Where the focus is on the gameplay experience, and how the other elements can contribute to that. Tyring to ape Sony at the "massive 3rd person action game" shtick isn't really their thing.
Which is why, continuing from my above point, this arcadish style of gaming and gameplay (which I realize has always existed with them from day one) is something they're now far more keen on embracing as it 1) requires less financial investment, 2) less development time, 3) fleshes out their catalog more, and 4) allows them to take more creative risks than if they were to go all out on large experiences. This also helps compensate for their traditionally very anemic third party support.
But unfortunately, I don't believe these arcade experiences and experiments such as Labo are the type of games that many players crave or have come to expect, and I also don't think it is these types of experiences that built Nintendo into a house of legend. Many want those vast, multi-million dollar grand spectacles. The RDRs, the GTAs, the TLoUs, the Spidermans, the Cyberpunks......the BotWs. And why not? They're amazing. They're massive worlds that are massive time sinks and are what people truly remember, not crossing gloves in ARMs or painting squid for a few hours here and there in Splatoon. These are enjoyable games, but they are nowhere near Nintendo's best.
IMO, Nintendo is a company that has been pulled, kicking and screaming at every point into the modern age of gaming, nigh resentful of their legacy and how particular design tenets from their older games decades ago have evolved to hold them to expectations of modern gaming to provide experiences that they are extremely reticent to tackle, for economic and logistical reasons, but nonetheless, that people have come to expect when viewed through the lens of the modern gaming.