The problem isn't MS' tactics, it's just that they take up too much space in the industry which doesn't allow Nintendo to have very many options. Two's company, three's a crowd.
If there was no MS (and lets be honest, MS doesn't need the game industry), Nintendo could make a comfortable living as the no.2 console maker, probably selling 45-55 million consoles a gen without too much fuss.
But because you have both Sony and MS, it forces Nintendo to have to go to all sorts of weird extremes, like trying to make games for soccer moms/women, who then get tired of said game and will never be interested in Metroid or Zelda or Kid Icarus or anything more difficult than a 2D Mario or maybe a Mario Kart game.
So that's a problem, they get backed into a corner.
In some ways, Nintendo's best bet might have been to have Sony just KO the XBox so badly that MS doesn't want to ever come back to the business as a hardware maker.
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