Good discussion here. I'll leave aside the rocketpig/Bodhesatva discussion on art and focus on the original topic.
There's an inherent flaw with the notion that the Wii will "destroy" gaming, preventing titles like Heavenly Sword from appearing. For some reason, ssj12 is worried that these type of games (focusing on visuals and cinematic story-telling) will disappear. That won't happen so long as there is a market for these kind of games - and quite a few posters have already mentioned this. What I'd like to add is that the sentiment expressed in the original post implies a degree of coercion which simply does not exist. Let me explain.
Video game consoles and software are sold in a market that is (relatively) free. No one is forcing consumers to purchase one system over the other, or forcing them to buy certain games. If consumers want to play games like Heavenly Sword, then that's what they will buy. Nintendo can't stop that from happening. Now if consumer are instead purchasing titles like Warioware and Cooking Mama, that's also them exercising their right of free choice. We can pan these games all we want, but ultimately consumers will vote with their wallets. That's why free markets (even with all their problems) have always been and will always be one of the most democratic institutions imaginable.
This is why it's fallacious to suggest that any particular console "must" win in a particular generation. If a console fails in the market, that's usually the result of consumers not wanting to buy it. What's the alternative - making people buy a product they don't want or need? Sony is faltering at the moment because they tried to put the product before the customer (much as Nintendo did in the N64 days, I might add). Because a free market lacks coercive power, the consoles and games that consumers most want to purchase will always do just fine.
If people want Heavenly Sword-style games, they'll sell well and more will be made. If that's not what consumers want, they will sell poorly and there will be few sequels. It's as simple as that. The Wii has nothing to do with it.