I think people try to focus on a concrete progression as to why successive Nintendo systems ran into trouble, but I think it is a much more abstract problem. From the NES to the Gamecube, Nintendo struggled because each system was less unique in the market than their previous system was; and they were forced into direct competition with other (often larger) companies, and were competing on a symmetric set of values which were not in line with Nintendo’s strengths.
The Wii and Nintendo DS changed this because Nintendo focused on producing a more unique product, and focused on competing on innovation and accessibility rather than the conventional values of processing power and features that Sony and Microsoft were focused on.
The Nintendo 3DS continues Nintendo’s efforts towards producing unique products, and while 3D may not seem to be the most innovative feature I actually believe that it is not the main focus of the 3DS. The combination of the motion controls and cameras, along with the bundled software, makes me think the primary focus of the 3DS will be augmented reality; and I suspect that Nintendo is betting on individuals finding value in blurring the line between videogames and reality.
