Nintendo certainly isn't as big as Microsoft or Sony, though. Bill Gates could keep $7 billion in his couch cushions.
For that reason I don't think we have to worry about Nintendo running out of competition this generation, but it will be very interesting to see what happens one or two generations down the road. If PS3 doesn't shape up, Sony may leave the arena, and if Sony leaves, one of Microsoft's biggest motivations for being in the industry is gone (stopping Sony's set-top box plans).
I think both will probably attempt 8th generation systems, but one or both of them may drop out of that race if Nintendo can carry over the success of Wii.