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They mainly punked them in a sense that Sony and Microsoft are catering to upmarket customers. But neither of them will be able to move even further upmarket (800$ consoles? Longer development cycle for games?).

If Nintendo plays their cards right they will be better at motion gaming (just like you said) and "hardcore" enough to get a decent share of the upmarket customers which would screw Sony's and Microsoft's business. They weren't even able to recover their losses yet.

I don't get the purpose of that new Nintendo controller so I'll wait until e3 to go bonkers over anything. Things are getting more interesting, though.