I think it was more about making money with subscriptions by incentivizing getting Nintendo Online to play against your friends. I bet they profited massively during corona from this business model.
I think local multiplayer absolutely peaked with the Nintendo DS. The download games where you could play with one cartridge, multiplayer without wifi, pictochat. Today you have to subscribe to shitty online services or at least play through wifi, which completely annihilates the possibility to play in a car, bus or train without a router.