I think Nintendo is driven more by the fact that the System is their bread and Butter.
Sony and MicroSoft could take more risks but they thought of the system as a means to sell other products beneath their company umbrella.
As far as Nintendo being on the shallow end of technology- I don't see it as bad. Look at the DS and the Wii. Everyone thought Nintendo was crazy and doomed, but they are now the most sucessful. Just because the Tech is out there does not mean that everyone will adopt it right away. Even though Sony and Micro Soft took a loss on their product it is still more than most people want to spend. Especially, when people (like me) feel they need a HD TV to truly enjoy it.
So part of good business is knowing what the market needs not just what you CAN do.
But I think the PS3's staying power may allow it to win 10 years from now. I think they built the PS3 to last for a long time rather than 5 years. Nintendo probably will have a new system out by then. (I wonder if Nintendo could support 2 systems like Sony is with the PS2 and the PS3. If the Wii stays profitable once Wii 2 comes out).







