The Wii's success is due to disruption. Basically, they are changing values of gaming consoles so that the Wii is best console to promote those values.
Essentially, Nintendo wants improved interface + social gaming to be the big features of games. The X360 and PS3 have better graphics and promote solo games ("epic" games.) But Nintendo has convinced people that graphics and solo play no longer matter.
Back in the PS2 days, graphics and solo play were important. So people bought it. The XBox and Gamecube were also designed for graphics and solo play. But by the time the Gamecube and XBox arrived the PS2 couldn't be stopped.
In business, this process is called disruption and has occured in many industries over the years. Sean Malstrom wrote up a really good (but really long) article about disruption in multiple industries and how Nintendo is doing it. If you have some spare time, take a good look:
http://malstrom.50webs.com/disruptivestorm.htm
There is no such thing as a console war. This is the first step to game design.
