They are now, I'm refering to the rise of playstation and the runaway success of ps2 vs Gamecube. Sony understood that their audience gets older with new generations coming in as well. Nintendo seemed to keep focusing on consoles as a toy, while the ps2 was a media player as well. (Which is what scared MS into jumping in)
I disagreed with this view point. Its not like Nintendo viewed consoles as a toy but instead as a game machine for the whole family. Nintendo did not waste time going after the graphics crown but instead stuck to their own strengths which has allowed them to continue to print money and not sell their hardware at a lost or even have to discount their own software. Nintendo does not have the benefit of making mistakes like Sony and MS, they cannot rely on other parts of their industry to keep them afloat during heavy losses or failures. While the gamecude did not sell like game buster, it did very well and from there Nintendo has consistently been in the green. I give Nintendo props for understanding their strengths and weakness, not chasing after their competitors and dominating their niche which they have proven very successful at.