It depends what you mean by fail.
It will make them a profit. So I don't consider it to be a possible failure.
Profit = success.
It won't "beat" the DS, probably not even the PSP, but the touch screen market isn't saturated yet. Once it is, then they will make a big innovation.
Edit: and I am willing to bet that Nintendo Ware will include VC DS games, GB, GBC, GBA, etc at some point.
I would cite regulation, but I know you will simply ignore it.







