Nintendo absolutely does NOT have next gen locked up. I think history has shown that ANYTHING can happen. Everyone thought the DS would fail. Everyone thought the Wii would fail and that the Ps3 would run away with it. Then everyone thought the Wii would sell more than the PS2. Nobody thought the Playstation would amount to anything, or that Sega would leave the console business. No one thought the NES would be successful, and thought it would die a horrible death at the hands of the superior gaming centric computers. All those assumptions were way off.
So I'm gonna be upfront and say I have no idea what's going to happen next gen. Nintendo's Wii U could find PS2 success, or it would regress and end up like the N64. We just don't know. It all depends on a number of factors - how much and how long Nintendo decides to support it, third party support, the marketing, price, the types of games released, etc.
I actually think the Wii U has a chance to be MORE successful than its predecessor, similar to how the PS2 was to the Playstation, but a number of things will need to go right for Nintendo. While the console will be launching with an instant advantage as it will be the first out of the gate, that is by no means a guarantee of a safe lead, as the Xbox 360 showed. So what does Nintendo need to do, and what needs to go right?
For one, third parties will need to be completely on board with their support, which for now looks like they could be. It absolutely CANNOT be a repeat of the piss poor Wii support, where third parties froze out the Wii late in its life along with Nintendo's own drought of games. Also, Nintendo needs to be careful to not limit themselves to the niche core type games and continue making games for the expanded audience that helped make Wii such a hit. And this doesn't just mean sequels to Wii Sports, Wii Play, Wii Fit, but entirely NEW franchises and indeed, genres, that follow in the same spirit of those mentioned games and get non-gamers, as well as ex-gamers, playing it. Vitality Sensor is an example of this, that could very well catch lightning in a bottle.
They also need to take online more seriously this time. And they need to avoid long droughts. They also must use their controller to its full potential, and make several games that take full use of its functions, unlike the Wii - after all, that is going to be the big differenciating feature. They also need a reasonable price, especially if its power isn't going to be much better than the current HD consoles. If all or most of these don't occur, I fear the Wii U could end up with N64 like success. but on the flip side, if most of theses DO occur, then the sky's the limit for Wii U.