They did it right, that's why. You can make as many excuses as you want for their success, but they just nailed it is all. They made something old into something new, advertised it well, priced it better than the competition, and as a whole had a better understanding of what the market wanted.

The message it gives out is something like "Play the PS3 if you want to have Lynchian nightmares".

Well those are some pretty bad ads, i don't think i have ever seen the baby one. But i'm pretty sure we can all agree that the Gears or bioshock ads are among the best.

Wait, was the point of the baby crying commercial?

They had Gears and Bioshock ads?

It looks like they gave money to a recently graduated movies student and told him "do something".

Regarding my allusion to David Lynch above, he actually made a PS2 commercial which is great IMO:

http://youtube.com/watch?v=T4tOvkvCvwQ

I don't get the "Third place" thing, but other than that it was an enjoyable ad. 

@Griffin, I agree that the Gears and Bioshock ads were good at creating an atmosphere, but they still failed to show gameplay.  Ads that don't show gameplay usually bother me.   

The target audience of those ads is the so called "hardcore market" graphics above everything...

The "Wii" ads target is the core gamer and the casual gamers, maybe they look retarded, but this is how real people acts when they are playing togheter (I'm telling you from real life experience), they are showing how fun the game can be, no how pretty it looks...

The target audience of the Wii ads is the same of the PS2 era... everybody can play it, and there is something for everybody...

The Wii simply made many things right.

1) They offered something completely new with the controls. The Gamecube was just more of the same in an ugly package

2) They copied the slick, white style from Apple. Which is a good thing. Whoever had the idea of the pink Game - cube should be shot on sight.

3) They started with a mass-market attractive price. That gave them a headstart. We will see if that will keep going for them later in the life-cycle when the PS3 (and of course the 360) are in the 200 dollar price range with much more powerful hardware but that is a different matter)

4) They came with a fully-loaded gun. After only 15 months almost all big Nintendo software franchises are already gone while Sony has not had one of their biggest franchises released. Let's see how they go forward from here.

5) The whole party gaming was an instant hype.

I am curious how this generation pans out, once the PS3 has had its big games, the party gaming fad is gone and all consoles have entered the mass-market price. Personally I think it will be close but Nintendo definitely made the right choices by shooting out of all barrels in the beginning.

As others have mentioned the turnaround was due to offering a new kind of gaming experience. Had the Wii not had motion controls and instead simply been a next gen machine with hardware specs similar to the 360 and PS3 is likely would have been slaughtered and done Gamecube numbers (possibly even worse).

I think the breakdown for the new the Wii installed base will be something like:

20 million Nintendo hardcore
10 million Hardcore attracted to it because of JRPGs and other hardcore titles
70 million Casuals only attracted to it because of motion controls and the very casual games and products being produced around them (Wii Sports, Wii Play, Carnival Games, Wii Fit, etc).

You can really see it already in the games being sold for the system. For example early adopters tend to be the system's hardcore but with the Wii we already know that many early adopters of it are in fact casuals (check Wii Fit's sales in Japan compared to Brawl's). So if there is already a high percentage of casuals this early in the system's lifecycle the percentage of them later on as prices come down will only increase.