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Nintendo turned around because of Iwata's vision, and maybe because Microsoft interferred with the industry. If Microsoft wasn't there to challenge Sony in to making a super-powerful console, with a super-high launch price, and huge development costs, PS3 would've been a lot less ambitious, and maybe, just maybe, would've been a REAL competitor to Nintendo's Wii.
In that case, we would be having a SNES-Genesis like console war now, I think. Maybe it would be called: Nintendo's revolt against the Playstation monopoly, in hypothetical gaming history books.

 Dude, have you ever seen this Sony commercial they've been showing in Europe?

 http://www.youtube.com/watch?v=QpbH5L2HkMQ