If Microsoft introduced Natal alone, then they would probably take the lead.
But since not only is Natal going to be released on PCs, but also Sony is coming up with their own solution, this will result in a fierce battle.
Nintendo will not respond, and as a result they'll probably be labeled as "behind" by Microsoft/Sony's PR. Because they will not considerably up their motion control investment, they will ironically also largely not participate in this battle. Much like they didn't during the last few years. Nintendo will instead focus on yet another paradigm, from which the Vitality Sensor is only a hint.
You'll likely see the "Wii-----------HD systems" situation repeat yet again, but now with Microsoft/Sony battling in the motion control department, while Nintendo moves onto yet another different concept.
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