It was a risk on Nintendo's part, but paid off extremely well. Their strategy to make the Wii an easily accessible, family-friendly system, with a new controller mechanic paid off incredibly well, despite the software sales not matching up to par with their competitors.
Also, to play Devil's Advocate here, Nintendo is the only company that is strictly in the console business and they are about making money. Sony and Microsoft have many more billions in the bank and they also have other divisions to fall back on, in case their product fails. That is why, when they do create consoles, they often operate on a loss for a few years and still manage to generate manageable revenue as a whole. Nintendo, on the other hand, with their marketing decisions, they generally have net gains each year, generally keeping things at a low cost for hardware production, plus licensing fees which they make developers pay if they want their games on the consoles.
As of now, game development has grown much more expensive each passing generation and for developers to keep pushing graphical power over time will cause the game industry, as a whole, to implode from within. Eventually, simply adapting to new raw power won't be enough, and small developers would have to be persuaded to develop on their platforms with little fees.
But, the industry has radically changed in many ways. So, we may not see the Golden Age of Gaming anymore.
