According to an interview with the Japan Economic Foundation's Japan Spotlight Bimonthly publication, Nintendo president Satoru Iwata has stated that online games aren't in demand. Comparing the Minna no Golf Online (Hot Shot Golf) to its offline counterpart, Minna no Golf 4, Satoru noted that sales were less, offering it as "proof that users don't want online games." The president added that "most users don't want a monthly subscription system," and that "procedures [to play online games] are not easy."
However, the "procedures" that "are not easy" may only be a reference to Japan--it is important to note that online transactions are more difficult in Japan, as there are more stringent restrictions on paying by credit card. Also, Japanese online services, especially mobile phones, are a lot more fee-based, making them more of a hassle than in the States, where more and more services are offered for free (content downloads, add-ons, plugins, etc). Although the company launched a modem and broadband adapter for its GameCube console, it has not developed any of its own online titles, with Phantasy Star Online being the only notable third-party online game for the console.
News source: GamePro