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The Switch was just the Wii U refined into something consumers actually wanted, rather than an innovation on its own.
I’d argue that Nintendo has always been pretty similar in terms of the amount of innovation they bring to their segment barring perhaps the quality of the Wii motion controls when launched and compared against similar attempts both by Nintendo and their competitors prior.
The Famicom / NES and the subsequent Super Famicom / SNES / N64 were just iterations on the same home console market for which Nintendo was far from the first to launch. The GameCube and the Wii shared a lot of DNA, with the motion controls really being the innovation. The Wii U, Switch, and Switch 2 seem to be a lineage of refinement as well.
In handhelds, they went from monochrome, to backlit monochrome, to backlit color, to two displays and some touch controls. You could argue that the 3D effect of the 3DS was innovative, but the allure of the feature died as soon as the industry realized the demand wasn’t there to keep developing it. Hardly as revolutionary as other competitors products, but more in touch with what their consumers wanted than their competitors, hence the market lasted longer for Nintendo than Sony with the PSP and Vita.
Ironically, the things Nintendo has done at the base system level that truly attempted to innovate have mostly been failures. The Virtual Boy was way ahead of its time, but the form factor was half baked and the eyestrain was horrendous. The Wii U was a success in that Nintendo learned what about the console was worth iterating on, but otherwise it was an abject failure as well because it didn’t offer enough to differentiate itself from the Wii.
For innovation to occur, there needs to be a predicating breakthrough in technology around which these companies can build a product. We’re in an age of rapid miniaturization and simultaneous increased power of integrated systems. It feels like more power = better, but this trajectory is going to yield new potential applications of technology in form factors that haven’t been fully explored yet. It’s just cyclical, and things take time to develop.
Plus - everything is slower when consumers demonstrate they’re satisfied with what the company is selling them. No need to dramatically change course when the current model is satisfying customers. The confluence of a new technology landscape and a dip in consumer enthusiasm for existing offerings is the typical spot for a hardware developer to innovate.