Ultimately, this is just a control scheme.
We all graduated from the atari-style joystick to 'modern' console controllers a long while ago. All Nintendo's done is proven out another control scheme. It's completely expected that it'll spread just like the controller and the mouse have previously (Windows is copying Mac! ...who copied Xerox).
In fact, it's unlikely that *something* like waggle won't be in all of the next-gen of systems; it's not like Nintendo's made a killing off of it so far, and still sell boat-loads of software for what is now essentially pure profit.
Merely having this as an alternate control scheme doesn't mean that the controller-based games are going away.
That said, whether this would succeed or fail depends on whether they go all in, or they just release it as another eye toy. Developers aren't going to limit their potential purchasers to only those who have an add-on peripheral.
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