The failure of the GC set Nintendo back, that is obvious, because of its initial color, design and software medium choice it opened the door for Microsoft and Sony to solidify themselves larger fanbases in the console market then they would have had, if the GC was better received.
That being said, it isn't where Nintendo started to go wrong and the current issues the Wii U had are more on Nintendo making bad choices at that moment, as while the Wii started to fall off toward the end, it still was a decent brand before the Wii U and its abysmal launch and later failure to capitalize on recapturing the initial Wii audience or growing beyond what they had with hardcore Nintendo faithful. That is all on Nintendo not being able to read the industry outside of (and to a large degree within) Japan.
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