They don't understand a lot of things, even some of which they've lucked into, like the competitive Smash scene. Or fan remakes and tributes (of which Sega notoriously doesn't send their lawyers after).
But they still make some incredibly compelling games.
Yes networking is def not a core competency. Strange though, the senior people are super technical (I recall the stories of Iwata writing compression algos in Pokemon)
Maybe the DNA of the company is just too focused on games specifically
This is just an aside, but this might explain why their (online) shop sucks so hard (and no browser on what amounts to a phone without a SIM card?)...
It's not just that the UX is a bit clunky, it's that it's a veritable morass of junk, a lot of which is regurgitated ports of PC titles...
They didn't understand how online shops work, to be fair all titles still at least play, but there is not as high quality control as I would have expected.
I say this as, Nintendo has a reputation and clout as a games developer (honestly none of their consoles have ever been great - they have mishaps in the software world but it is rarer), looking at their store you see a suspicious similarity to steam with sales - in fact as far as software goes a humble bundle subscription is probably a better value proposition. It's just not the rich and high quality, unique catalog people have come to associate with them. Maybe it was always like that regarding 3rd party games, but it just underlines how much they don't understand the internet...
Maybe the DNA of the company is just too focused on games specifically