I think that is terrible that they didn't give one of your kids a Christmas gift. If they hadn't given to any that would be fine, but to leave a child out is just mean.
My nephew will turn 10 tomorrow on Christmas day, and in the past I have always gotten him separate gifts. I wrap his birthday gifts in birthday paper, and Christmas gifts in Christmas paper. I usually spend roughly equal amounts on both gifts. This year, however, he wants a gift card for video games, so I bought him one larger amount gift card (what I would spend normally on birthday and Christmas) and then bought him a smaller gift - a marshmallow shooter and a bag of mini marshmallows- as his birthday gift. But it is still 2 different gifts, just not evenly valued.
A few years ago my brother and I decided that we would no longer give gifts to each others kids for birthdays and Christmas. My nieces are 11, 14, and 17, similar in age to my kids. We decided that instead we would plan joint family excursions twice a year- once to celebrate birthdays, and once for Christmas. We let the kids pick what we will do. Instead of spending money on physical gifts, we do things like go bowling, go snow tubing, go into NYC for a show or museum, go out for hibachi, etc. It's always lots of fun, and it gives the kids memories with their cousins.