It wasn't just that Nintendo would have to share the rights to their IP's, it was also that SONY wanted a ridiculous percentage of software sales. I'm sure it was even more than those two factors. Who knows what happens behind closed doors. I think I remember Nintendo trying to sue SONY over the name "Playstation," too. What a mess.
My End of 2008 Hardware Predictions (console only):
Wii : 50 million
360: 28 million
PS3: 24 million
These predictions were made on January 3rd and won't be revised