I find it interesting the two conflicting points about Nintendo here. Jay has been criticizing the power of the Wii. And that's not untrue. It's a weak system compared to its contemporaries. But now the more recent argument about the N64 vs. the PSX, I think we all agree that PSX "won the war." And while N64 had certain limitations that PSX didn't, I'm going to express my opinion that it was the more powerful system.
So we have a Nintendo system that was technologically superior that didn't win the war against a technically inferior but developmentally superior system. Ten years later, we have an extremely similar but reversed situation. Nintendo now has the technologically inferior but unique console that is outselling its technologically superior but less-innovative competitors.
Obviously, it's not a direct parallel, otherwise we'd be seeing more games for the Wii--maybe they are pumping out as many as they did for PSX, but my eyes just never pay attention to the shovelware. But like lj said, if it was just the gimmicks bringing people in, Wii sales would have cooled off over the past two years (not three, lj). I think reception and gamer opinion to it has cooled, but, like others have said, it's not because the system is inherently gimicky. It's proven that it can handle all sorts of genres capably. It's just not being utilized in the way it should. I just wonder very strongly what Nintendo is going to produce for the next generation.