I, for one, don't believe for one second that N. was so panicked to go for a price cut and thus a substantial reduction of profit per console for the foreseeable future instead of waiting 8 to 10 weeks for a game launch if they ever believed that the game by itself would be enough to sustain sales.
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An intresting note though, is that about one month before the wii price cut Iwata said in the investors interview that there was next to no discussion about a price cut for the wii. That does give you the impression that their decision was a bit hasty.

I'm not entirely sold that the DS falls outside the theory, to be honest: he's stated that it's very much a Blue Ocean product, and he's emphatically said that it's not a disruptive one, so I'd say its performance falls into the model he's set out. Considering how it was really hitting its stride when he started writing, he'd be daft to ignore the DS! And in his defense, I don't think he has.

As for the cannibalization, I'd argue that they're being successfully disrupted as we speak. Remember that both Sony and Microsoft have either openly emulated the new values introduced by Nintendo (Sony's Wand, which is made by the same company who did the bulk of the work for the Wiimote) or have tried to disrupt the disruptor (Microsoft's Natal, which is attempting to introduce its own new values, and is rather openly targeted against the Wii).

Remember, disruption does not mean that your competitors lose all their business immediately; it means that the disruptor introduces new values which gradually swallow up the incumbent, until the latter has either vanished from the marketplace or has shrunk into a niche player. The process takes time, though; take a look at the examples that Christensen has found, and you'll notice that it take years, sometimes even decades, before the disruptor drives the incumbent out of the market entirely. Don't expect Sony and Microsoft to not do fairly well for themselves this generation. The old market, after all, is still there. The question a disruptor must ask is "for how much longer"?

Regarding the price cut, you're correct that it'd be best to eliminate all the variables. That is, however, impossible. I've given some data that I think strongly implies that it was the software that led the Wii to have a stellar November: the price cut gave it a noticeable, but only steady, bump, while the sales curve sharpens dramatically when NSMBWii released. This increase is greater than the increase in 2008. To me, this is strong evidence that it was software rather than a price cut that's responsible, a conclusion that is strengthened by my examination of Media-Create's weekly figures. I admit, though, that I could be wrong, since there are lots of factors that influence sales.

And finally, I'll admit that Malstrom can, and often does, rub me the wrong way as well. Still, I think he's worth listening to, as he has a unique viewpoint that I haven't seen expressed elsewhere. I won't hold it against you for despising the man, though!

@yushire:

I believe I see what you're getting at, even though I think you're being a touch unfair to the man in your portrayal. My reading of his analysis (...) is that he's being more nuanced than that. I admit, however, that he occasionally indulges in rants against certain titles, and hypocritical praise of others. For what it's worth, he's confessed to the former.

Ooops, double post during editing...

I quite agree with you on some things, but what makes me disagree with Malstrom, besides his attitude, is his rigidity, he really can't accept that Nintendo could ditch any strategy it's currently following, shouldn't it see it fit anymore, and without asking for permission from all the analysts and wannabes so that filled their mouths and pockets with hindsight theories that explain Nintendo's renewed success.

About disruption through decades, well, in console world it isn't granted to the current disruptor, because nothing can guarantee it that its future ideas will be as much disruptive for the next gens.

About Malstrom's analyses, I agree with you that he's very often quite good at analyses, but he can't admit that good theories that explain the past have no absolute guarantees to predict future, first, and, second, it can exist more than one solution to a problem, third, finally, he downplays every factor that could go against his theories and wishes, a deadly error that brought Germany, Italy and Japan to defeat and killed Hitler and Mussolini, and France and Napoleon before them, just to make two quick examples.

Edit: I'd like to add one more thing. If Malstrom considers himself an analyst, I can still forgive his love for Wii (I love it too, although I don't dare considering myself unbiased and even less an analyst), I'd find even difficult for an analyst to not love it, it's a so interesting phenomenon, but I find unforgivable his blind hate for the not Nintendo consoles, it gives him a negative bias incompatible to fully correct analyses, as it still lets him remain correct on most Wii issues but sends him into denial regarding every possible positive argument in favour of Wii's competitors.

Sorry, I can't ignore a statement like this. Credit where credit is due, Malstrom was writing his explanations for the Wii success before the Wii had launched:

http://thewiikly.zogdog.com/author.php?author=8

http://www.cracked.com/article_15732_life-after-video-game-crash.html

you know, you should give credit to this guy too. Im too sad right now that David Wong's site right now was dead :(I should've read his other articles since he was more precise and correct than Malstrom.

He is more on point than Malstrom and he didnt relies on LOOOONG articles and blogs to send his message across. Anyone annoyed by Malstrom that he keeps saying Nintendo is disrupting the market and yet he didnt knew the future of gaming will be in  the future? At least David Wong has a idea:

http://www.cracked.com/article_15243_next-25-years-video-games.html

He wrote those articles 2-3 months before Wii launch, when Nintendo had already revealed its most important and revolutionary features and everybody that was not biased against Nintendo recognized that it was pure genius and had high chances to be successful and bring dramatic innovations to gaming world, as Nintendo had found the right formula to make cheap, easy and enjoyable motion capture, that never was all the three things together before. Actually I remember that then I believed Wii had already since launch, and with no need of add-ons, the precision brought after, instead, by WiiMotion+, and I felt a little bit disappointed that it wasn't so. And when I read his example of cheap and easy medium quality wine disrupting, in his boorish mind, quality wines, he left me speechless, maybe that stuff can disrupt other medium quality wines overhyped to pretend they are high quality and unduly sell them at luxury prices, but that example was wrong since the beginning, as Sony never released before console so horribly expensive as PS3 at launch and that price wasn't artificially inflated, at it was sold at a loss. His Seagate vs. Conner example is unfortunate too, as Conner managed to perform a big, unprecedented leap, thanks to 3.5" HDD's, but disruption lasted little, as other manufacturers too started producing 3.5" drives. And what's most sorry and pathetic, is that even back then he had that arrogant and patronizing attitude and used that cheap rethorical figure of talking with a fictional very dumb opposer, putting in his mouth the really weakest objections of the most unreasonable and stubborn analysts that denied Wii's chances, to make his own arguments look stronger. To put it bluntly, saying that Malstrom is better than Pachter, even demonstrating it, is not such an achievement, it doesn't make what Malstrom writes a new Holy Gospel and finally it insults his readers' intelligence.

No, this is incorrect.  Industry analysts still thought Sony would finish in first and Nintendo would be a distant third.

"No, this is incorrect. Industry analysts still thought Sony would finish in first and Nintendo would be a distant third."

And I remember those articles. Either Alby_da_Wolf wasn't around at the time or is trying some revisionist history.

Every analyst? Or only those that look at gaming just as at a business amongst a lot and know nothing about it besides sales? Or those that maybe were gamers in the past but long stopped playing the games of which they get even paid to analyze the market?

And anyhow, I was including also common people like you and me, most people liked Wii immediately and knowledgeable analysts cannot ignore common people's opinions, as they are those that are to buy products. Malstrom correctly acknowledged people's interest, but he cannot pretend he had a divine inspiration or an insight above that of common mortals, so he's free to mock short-sighted analysts, if it makes him feel better, but he should please stop patronizing his readers, he understood what was happening at the same time they did, yes, he knows how to write it down better than the average gamer, but that's it, he didn't create Nintendo's success and tens million Wii gamers, the vast majority of them, don't even know who Malstrom is, yet they understood Wii was perfect for them and they bought it.