Funny you mention the PS1 sales and then say it cannot sell that many because of inferior hardware. Lets see PS1 was a 32 bit console and still outsold the 64 bit N64 and was still selling when the 128bit Dreamcast and PS2 came out. Your logic is very flawed in that regard but it is anyones guess how well the Wii will end up selling in the long run but its specs have NOTHING to do with it at all.
Like it was pointed out already, the Wii doesn't need to reach such high levels of sales. Because Nintendo already makes profits on each console sold. If the Wii reaches 40+ M of sales, it will already have succeeded past everything Nintendo have hoped, and if it gets 60+ M, or more than the NES, Nintendo can say they reached nirvana in their strategy. Everything beyond 70+M will be a godly bonus to them. Then, even though I know a Wii2 is already being prepared, Nintendo will have no incentive to can their Wii. I think they will have the same strategy as with the DS, even though the Wii2 will not be just a redesign : it will be completely retro compatible, but more powerful with HD and all. But they will release it when they predict the Wii numbers dwindle below their competitors', and they will wait holidays period. They won't just destroy their Wii sales like that, if it's still selling strong, that would be nonsense. But they will transition nicely into the Wii2, so that even if competitors copy their features, consumers will stay with what they know works, and won't jump ship (natural evolution). That's assuming the Wii wins though, by selling more units than the other two.
1. Actual console shipments were about 103 million for PS1, currently probably just about 115-120 million for PS2 (though 125 and 135 will be hit easily), and about 61 million for NES. 2. While PS1/2 did expand the market in NA and Japan, the primary reason for their growth over NES/SNES/Genesis was the tapping of the European market. 3. Nintendo systems haven't lasted after their successors showed up... Not true. No lesser-selling system has maintained huge sales into the next-gen, while every higher-selling system has. The one sort-of exception to this is the SNES--the most mismanaged "winning" system of all time. 4. The NES was considered outdated in 1983, compared to the 16-bit computers of the time... And continued to sell well into 1992, even as the market became cluttered with much more powerful systems. The 32-bit PS1 was "outdated" when the N64 launched, but sold well over 90% of its lifetime total after that point, continuing good sales into 2003. In fact, the PS1 sold more during PS2's lifetime than GC or XB did. The power of a system doesn't matter compared to its ability to continue to sell to new markets. Considering Wii is basically an "up-to-date" system for 2003 or 2004, there's no precedent for it not being able to reach at least 2012 with good or great sales. 5. People suggesting that 25 or 35% of PS1/PS2 sales came from replacement systems are nuts. You can tell its not ridiculously high just by looking at attach rates: Do you really think PS attach rates are 13:1, 14:1, 15:1?? That much higher then every other system in history? Nah. Edit: 6. Nintendo will be continually upping Wii production for as long as they need to to meet demand. It won't halt at 1.2m/month.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.