In a sense, you could say that selling a console that doesn't lose money removes motivation, since no matter what you do, you're going to make money. But the only motivation that it removes is the motivation to do what you already know, what is already established to work well. Since Nintendo is not at risk financially, they were able to take the risk of trying a completely different approach to gaming. If it doesn't pan out, oh well, they didn't lose money, and the DS is still printing it.
I think we'll see Nintendo try some more things that might seem "odd" this generation. Heck, just looking at the videos for Mario Galaxy made me wonder what on Earth they're up to. It's not going to appeal to people who want what they want, it's going to appeal to people who are tired of the same games, and willing to try something new.
I'm not saying we won't see innovation from MS and Sony, but we'll certainly see it on the Wii (we already have).
