I might also add, nintendo took the risk with the ds not the wii, and it showed that people where bored of the conventional style of play that we had all become accoustemed to. The ds didnt even carry on the game boy name that had sold ridiculously well for nintendo, i think they did that incase the ds was a flop and they could quickly release the game boy 2 or whatever quickly and erase the ds from the minds of us all ala virtual boy style.

Arde: I agree, Nintendo spend big on getting things right thru R&D, market analysis and they then need to recoup this cost. However i feel that once this is achieved that they essentially sit back and watch the profits roll in rather than trying to put back into the system to keep it rolling long term. Not saying they don't support their own systems of course, compartively speaking i feel Sony and MS do a better job at it though and their driving force is because they are still striving for that profitability after having to recoup R&D, market analysis and console manufacturing losses which results in a better long term result.
 I would love to see the Wii have a 6-7yr mainstream lifespan, but this will be dependant on the efforts Ninty put back into it in terms of keeping sales rolling forwards.

jstam: The DS was a risk. and it paid off, but effort went back into the original DS to now have the DS Lite. The makeover is one area Nintendo seem to have gotten right. GBA to GBA-SP. But beyond the makeover the DS still has a lot of untapped potential IMHO that could continue to drive sales well into the future. Sony hasn't been applauded by many for its blu-ray decision, it has recieved some praise on some fronts but not much. But Sony extends beyond the VG market and into movies and long term i feel that blu-ray in the PS3 will mean that sony won't see their new HD format go the way of Beta tapes, or minidisc, so the risk (i hope for Sony's sake) is a long term calculated corporate risk considering all aspects of the company.

So as no one is confused i am a Nintendo Fanboy. I own a Wii, 4 Wiimotes + chuks, 7 games, 2x DS Lites, 26 games and a bunch of other merchandise. That being said i'm not afraid to look at Nintendo with a critical eye, the same as i would look at Sony or MS. 

On the topic of the DS, anybody else think a joystick would rock?  A pretty good joystick for all the N64 type games that they could "re-release" on the DS.  Super Smash Bros DS anyone?  Also, I still think they should put a multiplayer port for GBA games on the DS.

As far as hardware and software sales are concerned Nintendo is always the most profitable regardless of sales!

The GameCube was turning a small profit from launch , using the new PowerPC technology Nintendo was able to cut hundreds from the manufacturing cost when compared to lets say the X-Box which had older technologies just alot of them. The GameCube looked as good as X-Box at its peak put Halo2 alongside RE4 and many would argue GameCube actually had better graphics. Nintendo managed to build a console that had all the properties of a big budget unit for the price of a low budget unit. This turned into nothing but profits from their hardware division despite a massive lack in hardware sales.

Another thing Nintendo has always been known for is selling outstanding numbers of first party software on a small number of hardware units! Lets look athe sales of the GameCube's highest selling first party title (SuperSmashBros:Melee - 6 Mill) then at Sony's (Gran Turismo 3  sold 11-million copies) a console that has sold 120-million hardware units failed to push more then 5-million copies of its highest selling title then a console with only 26-million units sold. Nintendo's first pary titles tend to all sell around a million copies its expected! 

Lets look at third party sales now! Lets look at the highest selling franchises shall we!

1st place = Mario with 193-million copies sold!

2nd place = Pokemon with 155-million copies sold

7th place = Legend Of Zelda Approx 49-million copies sold 

8th place = Donkey Kong 48-million copies sold

Sony's Gran Turismo placed in 10th and was the only Sony franchise to make the top ten cut with 44-million copies sold! This shows Nintendo first party power and while the GameCube didn't get nearly as much third party support Nintendo's first party titles were still able to generate some very good profits!

 Nintendo dominates its own platform's and almost always sells its hardware for a profit. So when Microsoft lost 100USD a unit they had to sell two games per console to get their profits back while Nintendo never had to sell a single game to have the same amount of profitability!

MS had to sell more than two games to make $100 since they didn't clear $50 per game...

 Anyway,  making a profit right of the bat is great. For starters you get to recout your R&D costs right away. It also gives you money for improvements and gives you the flexibility to drop prices whenever you need to.

Nintendo took a big risk with the DS. If it failed they would have the GB to fall back on and still be ok.

They took a greater risk with the Wii. If noone liked it, then what, no console this gen... But it is paying off as well.

Sony took a huge risk with making a $600 powerhouse machine (and losing money on each unit). And since they dominated last gen they should have just played it safe and made the PS3 a powerful machine that they could sell for $300 and just start pumping out the games and getting every 3rd party to release games.

Now they are in a really bad spot. They are losing money, market share, and 3rd party support. And each time they lose a bit more of one of those it just helps them lose from the other two that much faster.

In a sense, you could say that selling a console that doesn't lose money removes motivation, since no matter what you do, you're going to make money.  But the only motivation that it removes is the motivation to do what you already know, what is already established to work well.  Since Nintendo is not at risk financially, they were able to take the risk of trying a completely different approach to gaming.  If it doesn't pan out, oh well, they didn't lose money, and the DS is still printing it.

I think we'll see Nintendo try some more things that might seem "odd" this generation.  Heck, just looking at the videos for Mario Galaxy made me wonder what on Earth they're up to.  It's not going to appeal to people who want what they want, it's going to appeal to people who are tired of the same games, and willing to try something new.

I'm not saying we won't see innovation from MS and Sony, but we'll certainly see it on the Wii (we already have).

Somehow, people believe that Nintendo is so great because of some magical faerie.

No, Nintendo is not operating like most western companies. They are ALWAYS innovating, searching for new way to make games. They see every caveats, every good ideas and try to make them into something good and enjoyable.

That's why an idea they started to explore 10 years before becomes such a great game.

They also have that "picture culture", like most japanese people have, but that most westerners lack. The thing that make you love some graphics, despite them lacking polygons, detailed textures, ... the very numbers that most westerners love so much. I'm still chuckling (shinobiwarai would be a good term for japanese) when I see people amazed that a game like Wii Sports is selling more than Gears of War in Japan. A lot of westerners can't understand that, as the "numbers" on Gears of Wars side are all bigger.

Nintendo is always innovating, but the competition doesn't understand them, or even their games, so they just can't understand how to copy them and do as good.

But don't worry, Nintendo always made profit, and that's sad to say but they still are the most innovative company in gaming. Most innovations come from them, and yet, they nearly always made profit. So I don't understand how can someone come to fear that it won't go on like before.

Sure, their home console sales are declining, people want something else, that happens. They must change, that's all. I was never a Nintendo fan, I don't even love most of their games (Mario, Donkey Kong, Metroid), but I must admit I'm always impressed by the appeal their game have, and the quality they have.

I think quality is what impressed me the most with Nintendo : they just don't compromise with quality. Compare to the two other players, and it's striking ! They just won't release a defect product to you, even if there are supply shortages, and they will replace your slightly broken unit (one pixel dead on a DS) right away, even if there are shortages. The great quality of their product is what made me buy the GC to begin with. My last Nintendo console was the SNES, which still works perfectly well.

The Wii was such a huge risk. 4 months after launch, I'm still hearing the doom sayers talk about lack of HD, gimmick controller, fad passing, supply shortages luring to other consoles (shinobiwarai), ... And it's not finished yet, now we have poor 3rd parties games, games drought, ...

But I learned sth, looking at forums with lots of hardcore gamers : they are impossible to please, always complaining about sth, so there's no point in trying to please them.

You cant really say that which one took the bigger risk, Nintendo or Sony. Both took big riks, but the risks are completely diffent. PS3 might sound a big risk for Sony, but it really isnt. Even in the worst scenario PS3 will sell lots over 10 million and this will help the Blu-Ray take over the HD-DVD. And that prints money. Wii also looks like a big risk, because its different, but even in the worst scenario, it would also sell far over 10 million, but it makes profit and they still have the DS. But Wiis failure could have lead Nintendo to exiting the home console markets, and perhaps become either only handheld company or even 3rd party. Micro$oft took a bigger risk with Xbox than with 360, but its hard to tell that do they even know what they are doing. Sony played Safe by doing the same what they had done before. Nintendo took the risk by bringing something new. I would raise a hat to Nintendo for bringing something new with risking its home console market. Game developers making profit is important for gamers too. This ensures that quality titles is coming still in the future. Theoretically no one wins if the developer sells hardware with a loss. About add-ons etc. Nintendo usually is developing something new for their home consoles, so i would think that we will see (or at least Japan sees) add-ons (there was at some point a DVD add-on planning), new controllers and others. But usually Nintendo focuses on features which affects in playing the games. But as with the DS, i think so too, that it has resources which has not been fully used yet. I personally dont need movie or MP3 player to my DS, but some may find it usable (the player mentioned earlier, i think it is for GBA originally), analog stick could also be good and the GBA link would be nice.