The way I see it, most of the video game industry acts like a young immature child who leaps before he thinks, but who's accepted because he keeps up with the times. Nintendo is more like that old martial arts master who may not get nearly as much attention as the child, but who still tries to instill discipline on that child.
With the 5th generation, it was Sony who wanted to go after the higher production values, and why not? It's what looked cool at the time and it's what everybody was asking for. Nintendo on the other hand wanted to focus strictly on gameplay while graphics and other high production values were secondary. The result were games like Resident Evil and Tomb Raider on PlayStation, where the production values were nice for it's time, but took away from the gameplay resulting in both gameplay and production values being horribly dated in five years. With the Nintendo 64, we got Super Mario 64 and the Legend of Zelda: Ocarina of Time. Both games have stood the test of time very well and had become more influential with modern game design than the PlayStation classics.
Years later, we got the Wii from Nintendo while the other guys got the powerful HD consoles. With powerful HD consoles, we got expensive multimedia devices with multiple sku's and high failure rates. We got prettier versions of last gen games too. They were "cooler" and it's what the industry thought everybody wanted. With Nintendo, the focus was again placed on great gameplay and a simple device that was affordable and that everyone could easily understand.
Now, we're seeing the trend of releasing unfinished products with the promise of a patch, dlc for content that should have already been in the final product, and a bunch micro transactions that give us incomplete gaming experiences. Nintendo on the other hand gives us complete experiences on the other hand with any dlc being a bonus rather than an essential part to the game. Nintendo also gives us a complete product on day one and is still willing to delay their products to ensure that.
So imagine if Nintendo had disappeared after the SNES. I think the industry does need Nintendo around to give it the occasional slap in the face. Without Nintendo, there is no discipline in the industry, just younger kids chasing the latest craze.