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.
Its not a neccesity for anyone, its just a cash grab. Nintendo doesnt do it because if they did, people would simply stop playing their games. Outside of the good reputation they somehow have, their game quality is fairly low. They do pioneer a lot of new ideas afaik, but they are far from doing them the best. BOTW and TOTK are their most impressive games, which arguably dont have a real competitor, but between Palworld, Genshin Impact, and Fenix Rising(which i think is also nintendo, oof) they arent particularly impressive.
My point is that nintendos reputation and good consumer side service, they can take risks that other companies cant, because they will sell regaurdless. Hence, if they reduce their consumer side service(loot boxes, microtransactions, paid dlcs, etc.) they dont really have anything to stand on.