PlayStation created the Industry, Xbox changed the playing field

[Dr.Henry_Killinger]

For the record, after sleeping in on it I realize that I made a mistake in my classification of the Wii's market. In reality, we can't know if is gamer, non-gamer, hardcore, etc. even with the market increase and even if we have a general idea that casuals are who picked up the Wii, because that is still subjective.
Furthermore, It presents a problem when I introduce the PS1.
So from this point further, I've changed it.

The PS1 and PS2 introduced a new market that supplanted the old, one where focus on 3rd parties and broadened demographics became more important. Sure other companies did, but since this discussion is limited to how it affects the big 3 today, those companies are irrelevant. Because PlayStation changed the market for traditional home consoles, it became incompatible with Nintendo. This is mostly due that as a game developer themselves, Nintendo controlled other 3rd parties to maintain dominance. Since PS opened the doors on 3rd parties that approach has certainly backfired, and Nintendo's 3rd party support has been dwindling ever since, peaking with the GameCube. In the 4 generations, competing against PlayStation in the industry, console failings notwithstanding, the Wii was the only one that was first because it address a new market in the same way that the PS1 originally did. However, unlike the PS2, it has yet to capitalize on that market in 8th generation despite an uncontested year lead.
Since I can't describe the demographic of the Wii's marketshare, its erroneous to say that they moved on to mobile devices, but I can say that the popularity of mobile gaming may be affecting home consoles and are certainly affecting the industry as a whole, shifting focus there. but that is all I can say.

While its early, its obvious that thus far they have not solidified this market, if they can, and so trying to compete within PS market as before is obviously not going to work for Nintendo.