Soundwave, that's a perfectly fair and interesting question to ask.
However, I think Nintendo already has a winning strategy. By focusing on family-friendly entertainment, the company provides something the others do not. Moreover, there will always be a new generation of kids interested in gaming, so the audience keeps replenishing itself all the time.
Also, I would like to argue against the myth that Nintendo ONLY caters to children. Nintendo makes games for everyone, and that is part of its philosophy and part of its appeal. Maintaining its brand is probably more important than releasing a few M-rated titles.
I would also like to argue against the myth that somehow M-rated content imbues a video game with excellence. It does not. Yes, there should be diversity in video games; there should be M-rated games. But a game is not automatically better because it has sex, drugs, violence, gore, and other adult content.
And lastly, the majority of video games and consoles are bought by so-called "casual" players. That goes for Wii; that goes for 360; that goes for PS3.
Rant over :)
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