@DSLover: They actually sold the GameCube for a small loss at launch..
As to why Nintendo are the best? They consistantly create titles of the highest quality and they have been able to keep their key franchises fresh for many many years where others have failed to do that.
They innovate in all areas including; interface, hardware, gameplay, marketing and business models.
Their games include the likes of Super Mario Bros, Super Mario Bros. 3, Super Mario World, Super Mario 64, Super Mario Galaxy, The Legend of Zelda, Link to the Past, Ocarina of Time, Majora's Mask, The Wind Waker, Twilight Princess, Minish Cap, Metroid, Super Metroid, Metroid Prime, Metroid Prime 3: Corruption, Metroid Fusion, Super Mario Kart, Mario Kart 64, Mario Kart DS, Mario Kart Wii, Donkey Kong Country, F-Zero, Starfox, Starfox 64, Super Smash Bros, Super Smash Bros. Melee, Super Smash Bros. Brawl, Kirby Adventure, Paper Mario: The Thousand Year Door, Nintendogs, Brain Training, Wii Sports, Wii Play, Wii Fit, Wii Sports Resort and many many more..
I think that covers it..