Okay, so basically your problem is, you seem to believe to become the "IT" thing, you need an amazing launch. That's easy to disprove.
See the DS. The console did not really take off until the killer apps (Nintendogs, Brain Age, NSMB, MK) came out for it, and more presentable hardware was released (DS lite). The PSP was matching it in hardware sales, but from that point on it was no contest. The DS' sales literally skyrocketed.
Modern Warfare 2 was the "IT" thing because Modern Warfare 1 was so damn good. Everyone who played the first game convinced their friends to buy it, which is why the launch was so strong. Again, word of mouth. Just look at how strong Modern Warfare 1's legs were.
Take a game like Just Dance. Virtually nobody knew about it or how successful it might be when it launched, but once it got in the people's hands, the sales just took off. That is the power of word of mouth, something you are seriously underestimating. Yes, a big launch will amplify this power (due to it being in more hands), but it's not entirely necessary.
Speaking of Just Dance, the game also helps disprove your brand name theory. Ubisoft didn't need Nintendo's name on the box to achieve Nintendo-like sales, they only needed to follow the same strategy. Although it started slower than it would if Nintendo pushed it (because Nintendo deservedly has a huge following), it still ends up selling tons. If Nokia came out with the iPhone, complete with the advertisements, app store, fun interface and all, no doubt it'd have sold fantastically, even if the launch wasn't great. Word of mouth would have done its work.
Wii Music is a great example of what happens when a hyped product that isn't desired is released. It's frontloaded due to hype from a top-notch brand (Nintendo), but once most people realize it isn't what they want, sales drop off. The so called "casuals" aren't mindless idiots, they know what they like and have fun with, and the sales will always reflect this.
Basically, even if PS3 ended up being popular, that wouldn't stop people from loving the Wii. Nintendo had a great advertising campaign right to the people that needed to see it. Besides, did you somehow forget how PSP launched right next to the DS? Both consoles did just fine. The "console wars" aren't a zero-sum game.
Lastly, for the Wii sellouts... don't even bother, this isn't arguable. The Wii was sold out pretty much everywhere during its first year.
November 06: http://technology.timesonline.co.uk/tol/news/tech_and_web/personal_tech/article643166.ece
http://www.foxnews.com/story/0,2933,230561,00.html
December 06: http://news.spong.com/article/11274/Biggest-Console-Launch-Ever-One-Million-Wiis-Sold
January 07: http://www.nytimes.com/2007/01/31/technology/31game.html
etc. etc.
Record breaking launch sales: http://en.wikipedia.org/wiki/Wii_launch#Sales
