While Nintendo games very likely don't cost more than $200 million like the highest end Sony games, their biggest games probably aren't super cheap either. Zelda is essentially their big AAA series that requires a ton of manpower to ship, which started to have five year cycles between 3D entries ever since Skyward Sword. They also explicitly put in more money into graphical flourishes in Super Mario Bros. Wonder, and Super Smash Bros. Ultimate would also be pretty expensive, especially with licensing fees.
The main difference is that's not all their output and people can accept lower budget games like Paper Mario: The Origami King, or Clubhouse Games, or Super Mario Party, and all that stuff. Those fill the rest of the gaps between tentpole releases.
Also the elephant in the room is that the vast majority of budgets actually come from salaries, and Japanese salaries are proportionally lower than in the West, especially in a place like California where housing costs are through the roof so wages have to keep up.