When I first read about it, it dawned on me that Nintendo would dominate this generation. I thought it was an amazing idea, one that renders traditional controllers as archaic in comparison. I realised that a simple boost in graphical capabilities was not enough to advance the industry. The paradigm shift that the Wiimote promised would be too irresistable, and would likely amount to a revolution in gaming.
Of course the DS kicked it off in many ways, but the Wiimote afforded more possibilities than the touch mechanism. The addition of the balance board only added to the Wii arsenal and left the door wide open for future advances in gaming interfaces through the addition of innovative new peripherals.
I was very impressed with Wii Sports when I first tried it. Although the lack of depth was perhaps a little disappointing. I love how it simplified the controls, (eg, no control over running in tennis or baseball) sometimes less is more. This approach facilitates multiplayer. It's more open and less intimidating to those who aren't so well versed in a game, thus adding more competition to the experience. (I'm sick of absolutely dominating other players in 'hardcore' games simply because of the fact that I have played the game more often - it really kills the fun for all party's and can be a rather pointless excercise).
Nevertheless, I am somewhat disappointed in the lack of support for Wii controls thus far, and the potential promised by the Wiimote and Wii Sports has yet to fully materialise. I feel that Nintendo with their recent releases have focussed on the traditional base, at the expense of advancing the Wiimote gameplay further. I believe that this will be rectified at E3 when they announce their new games some of which will have an emphasis on Wiimote capabilities.
As for third parties, I don't hold out much hope in their ability to advance Wiimote innovation, although Zack and Wiki was a step forward. In the end it will be left to Nintendo to spearhead the charge while third parties follow the example.