> why Nintendo rarely outsources games
That's an overstatement: Nintendo co-develops a lot of titles with other studios, outsource a lot of their smaller IPs (mostly to Japanese studios), _and_ is being rather friendly to letting people do smaller spinoffs of their big properties.
Examples of third-party colaboration, in no particular order:
- Koei Tecmo co-developed Fire Emblem: Three Houses, did both Fire Emblem Warriors and Hyrule Warriors, which are franchise spin-offs using their Dynasty Warriors engine and gameplay, and Nintendo trust them so much that their next canon Zelda game will be a Breath of the Wild prequel developed by them, using the Hyrule Warriors label.
- Bandai Namco is more or less the main developer of Super Smash Bros since the Wii U/3DS iterations, with Sora Ltd being essentially just a consulting company run by Masahiro Sakurai. Bandai Namco is also co-developing the new Pokemon Snap, and developed Metroid: Other M.
- Capcom developed both Oracle of Ages/Oracle of Seasons and Minish Cap, two portable and very well regarded entries in the Zelda Franchise.
- On the Mario side, pretty much all of their Mario sport titles are handled by Camelot, with the exception of the Mario & Sonic Olympic series, which are published by Sega direcly, and their highly praised portable RPG series Mario & Luigi was developed by (sadly defunct) Alpha Dream.
- Then there was that time when they gave the Mario franchise to Ubisoft and they made a Rabbids-crossover, XCom-like game, which is just too goddamn funny to not put in here separately (especially since it was also fairly well received by critics).
- Good-Feel, another Japanese developer, made entries to both Kirby (Epic Yarn), WarioLand and more recently, Yoshi franchises (Wooly World/Crafted World).
- There is a metric shitton of Pokemon spinoffs (that's probably where you will find the worst offenders of bad outsourced games, to be quite honest, but even then there are series like Pokemon Mistery Dungeon, by Spike-Chunsoft, which are very well regarded).
- And as a another Zelda example, Cadence of Hyrule, made by the Crypt of the Necrodancer developers.
There are more examples, but overall a large part of their output nowadays is made by third-parties, with of course a lot of their projects - big and small - being handled by their in-house studios. That's not even counting the fact that some studios readily associated with Nintendo, like Intelligent Systems and HAL Laboratory, are actually independent (they just like working with Nintendo).
Sorry for the large response, I was bored.