wow, interesting thread, I thought console sales were down from last generation. However, I still think the Wii has not made the huge impact Nintendo expected. Looking this chart,

http://www.vgchartz.com/hwlaunch.php?cons1=Wii&reg1=Japan&cons2=GBA&reg2=Japan&cons3=DS&reg3=Japan&weeks=100

DS and Wii were very similar until DS sales suddenly exploded. This hasn't happened with the Wii, the combo Mario Galaxy, Wii Fit, Mario Kart didn't make that impact.

Wii is doing really good in Japan, but It still has yet to take off like the DS has, I think the main deterant that's stopping it from doing that is software, there really hasn't been much in Japan but with the news at TGS (most games Wii/DS), i think it will eventually change.

 No, I think Nintendo knew that Japan wasn't going to be huge for their console.

Almost all their initial games were directed more western than previously, and only a few niche games are still Japan directed. The fact that they have come, makes it seem like the Wii was more successful in Japan than expected.

the gamecube didn't have final fantasy main series. it will do okay.

I remember, not long ago, Iwata said Nintendo is having trouble reading Japanese market. The Wii is doing great, better than PS2, but I'm sure Nintendo expected more. Is not that they didn't expected huge sales, but right now they are having trouble on how to do it. Smash, Galaxy, Kart and Wii Fit didn't do it, so they are trying with different ideas like Captain Rainbow, Wii Music, or more virtual console games. It seems, however, they still haven't find the answer.