nice read.
i think personally that it's not that the gaming industry needs to keep having new ideas each generation, but that it occasionaly needs a kick up the backside, which is to say that the road Nintendo is currently going down is fine, they don't need to switch lanes (read: think of new hardware innovations) unless the industry as a whole becomes stagnant.
Next generation they can build on and improve their current ideas without seeming to be hypocritical or rehashing ideas, and the industry will stay fresh by having both Nintendos blue ocean, as well as all three companies 'core gamer' solutions, and possibly whatever Sony/MS have in the way of 'New Gen' ideas.
In referance to your point about the casuals not being willing to pay for new hardware all the time, price point is the main issue with that, as a lot of Nintendos blue-ocean will not have considered a Wii yet, and won't do until it is say.... £100/$150, they may possibly be willing 6 years later (4 years into next gen) to purcahse the Wii successor for a similar price, and any that are still happy having just a Wii, could be replaced by newcomers who maybe didn't pick up a Wii.
Also you wrote this a few months ago, already the WiiFit board is on it's way...i'm hoping for snowboard games and if possible, the ability to use it as foot pedals for racing games (alongside any minigame affairs)
