^^
Never wrote it must take 3 years, but after 3 years the trend looks stabilized at less than 1:1 for new:old
Nintendo can disrupt the market if it almost completes the process during this gen, as otherwise nothing and nobody will be able to guarantee MS and Sony won't prepare any effective countermeasure. This doesn't mean that I categorically exclude the disruption could happen, I simply say that if the trend stays at 1:1, disruption won't happen. Reality tells us that Nintendo is an almost unbeatable market leader this gen, but more than disruption it brought innovation. For disruption to happen, both MS and Sony should do almost everithing wrong both in their old market and in their attempts to get a slice of the new one, and while I agree with you and Malstrom that they aren't by any means ready to do well in the new market, I think they are both doing quite well in their old one. This said, I like mouse and keyboard and I like motion control too, if done well, I don't like gamepads except a few PC specific ones like my Cyber Snipa PC Gamepad, that's very different from console pads, it's more an ergonomic and reduced mapping of a normal keyboard, byut I wouldn't ever deny that a lot of people like them. And there are a lot of people like me, liking PC + Wii, or PS3 + Wii or XB360 + Wii, and a minority liking every console and often the PC too, plus all those only liking XB360 or PS3, put together we represent the vast majority of gamers, so I really can't agree with Malstrom's manichaeism. Extremism is a minority attitude, but extremists won't ever realize it, not even when clashing against the plain truth and matter of facts.

Here is a graphical representation of disruption: 

The pink arrows are the important part.  Everything is upstreaming, because that is the natural thing for the industry. There is no such thing as staying in the downmarket. Every company tries to be more perfect, more developed.Nintendo is upstreaming with Wii Motion Plus and Wii Sports Resort. This is the only way to go, for them. 

Sony and Microsoft are also upstreaming. They could try counterattacking Nintendo, but Nintendo would be cornered, and it would put every resource on defending from a counterattack. 

I already mentioned gunpowder vs. swords and crossbows. Saying that Motion controllers are good for their own niche is like a 16th century soldier saying that muskets are good for their own niche (of less trained soldiers who gave up accuracy and swiftness for the simplicity of shooting a gun).

True, but guns, the new downmarket, and they will evolve, and become more mainstream, while swords and arrows are the old upmarket that is doomed to be used by higher and higher circles, until they disappear.

bla bla bla

@Alterego-X:
Gunpowder-swords and crossbows isn't a fitting comparison, as the progress of firearms made the old weapons a losing choice on the battlefield.
In this case we are looking at a scenario where ~50% gamers like the new controls, and ~50% the old ones. Amongst them not all like exclusively the former or the latter, the overall situation is that forces leading to coexistence of the two worlds are stronger than those leading to one replacing the other: old gaming isn't strong enough to prevent Wii from winning, Wii isn't strong enough to totally replace old gaming or reducing it to niche. If a disruption were in act we should be able to notice a growth, even a slow one, of Wii market share, instead it stopped under 49% and isn't growing anymore. If things change, we can reconsider the possibility of a disruption, no, let me rephrase it better, a disruption started and could restart even now, maybe it's getting again stronger, after the initial huge leap from 0 to almost 50%, right now and we don't know yet, but data we have available still say coexistence, sorry.
After Xmas we'll have more data, past Wii life will be longer and its future shorter, so if it doesn't start again growing, the possibility of a total disruption will be furtherly reduced.

What gets disrupted is not the marketplace, but the plans of your competitors.  Because of motion control being the differentiator, and not high def output this generation, the Wii has disrupted the plans of Microsoft and Sony, forcing them to adjust and go also for motion control.

What you see Nintendo saying is that they aren't just going to do high def.  They will be adding other things when the time is right for it.  Anyone want to speculate what that is?  I wouldn't know, but apparently speculate in my next post.

Until the Wii came out, Nintendo's success at disruption was in the handheld area.  Virtual Boy was a failed attempt to change things, but the other handhelds happened to be successful, and Nintendo ended up owning that niche.  Nintendo also seems strategic in what they are doing.  The DS happened to come into being due to the SP showing that people were willing to buy a fliptop handheld.  And touch as a feature for the DS, happened to lend way to people being up for controlling things in new ways.  I guess one can get a tip off to what Nintendo will do next by seeing what it is doing in the area of handhelds.  They may redefine the storage format, besides high def, as their new way of doing things, because of the DSi having internal storage.  Imagine the next Nintendo home console to not be disk based, but have storage on small one terabyte or more flash ROM cards that also are able to be rewritten, that feature near instant load times.  Do this besides the high def and they are onto something.  Games with near zero load time?  I think that is a competitive advantage.

Of course, I am not going to bet anything on this, and shouldn't speculate.

I enjoy these discussions on disruption, even though I only understands ~25% of it. It's very fascinating.
Also, even though I kinda dislike the guy, what Malstrom says here is interesting. For the sake of a serious debate I hope he can keep his fanboyish and arrogant side away, and just leave the good part.

Malstrom truly is the Anti-Pachter.

  No, we know that it is working is in the response of Sony and MS, they are trying to basically counter Nintendo with NATAL and the wand.  The response of the disrupted incumbent company is to try and co-opt the disruptor, to try and prevent them from upstreaming further, this is NATAL and the Wand, they are trying to protect themselves from Nintendo.

”Of course, it is worse than this. Not only does an incumbent try to bring the innovation to its existing customers, it typically tries to bring it to its best existing customers. Ironically, these customers value the new attributes of the disruptive innovation the least.”

-Clayton Christensen

^^
Yes, but, first, Sony and MS, they are trying to have a foot in both camps, they aren't abandoning the old one, second, we can't tell if they'll succeed, yet, but they are working to make both worlds coexist, destroying the old market wouldn't bring them any good.
Malstrom takes for granted that both Sony and MS will do the wrong moves, but Christensen describes one of the mechanisms which disruption happens through, he doesn't say that this always happens, he describes what happens and what brings disruption, but if not enough mechanisms are correctly triggered, disruption doesn't happen. Let's tell it simple: if the disruptor does enough things correctly and the disrupted makes enough mistakes, and the market reacts favourably enough to the disruption, disruption happens, otherwise it doesn't, an evolution and integration between old and innovation happens, instead, but in a softer way, faster and deeper than usual thanks to the higher potential of disruptive ideas, but not a proper, complete disruption.
In this case Nintendo is doing things right more than enough, hence its success, and the market is reacting favourably to the new ideas, BUT... But the market likes the new ideas but isn't fleeing from the old ones, and we have no clues that tell us for sure that Sony and MS made enough fatal errors to kill their current market, have no chance in the new one and lose any possibility of recovering. what we can say is that if Nintendo keeps the new market almost all for itself and MS and Sony can't get a decent slice of it, but they have to keep on dividing the old one, they are obviously doomed to remain second and third, and IMVHO for this gen this fate is sealed, they'll remain second and third, fighting till the end for second place.
But still even third place is big enough to not being definable as niche, so this isn't disruption.
As for the new market, Wand and Natal are too late, so they'll be just experiments or little more, but Sony and MS must do these experiments to at least partially fill the gap from Nintendo, to avoid getting caught unprepared when next gen begins. Obviously by then Nintendo will have something new to present, but we can't know if it will be as successful as motion control, while motion control itself will be a requirement for every 8th gen platform.
And then, there is the good old PC, where SW houses are quite free to follow the roads they want without having to care for MS, Sony or Nintendo strategies, a huge, anarchic cauldron ready to welcome every gamer not happy with any new console.