Nintendo lost once they got competition. It can be argued that the Genesis "beat" the SNES, and we all know what has happen in the last decade. Nintendo remains stuck in the same place while their competition continues to expand. Sony has done far more to bring gaming to the masses than Nintendo imo. The Playstation sold 100 million units. That's something a Gamecube with waggle tech is not going to do, even with grandmas buying it.
Nintendo continues to rehash their IPs, refusing to create new ones that appeal to casual gamers. Why doesn't Nintendo have a FPS, or even a conventional RPG? Rare and Square Enix aren't there to make those games for them anymore, and now Nintendo is left with a void. Instead of creating a new IP, they prefer to take an existing one and defile it to change it into something it's not (Metroid Prime Hunters). Don't get me wrong, MPH is a fun game, but it truly represents what's wrong with Nintendo. Instead of creating new IPs, they would rather milk existing ones. If Sony did this people would cry foul, but Nintendo has millions of fanboys who LIVE to do damage control for the company.
Brain Age and Nintendogs may work on a handheld, but it won't save a console. Consoles are not for quick game sessions. Zelda, Mario, and Metroid are ready for the system, but that's not the solution. They all look amazing, but come on: gamers have moved on. There are so many things Nintendo could do, but they are either too dumb or too complacent to do. Why can't Retro make a true "Halo killer"? They've got talented people who have worked on some of the greatest FPS games of our time. In fact, why not give theStar Fox series to Retro and have them turn it into something to combat the Ratchet and Clanks out there? Why not have Camelot or Intelligent Systems (or both!) create big time RPG games for the Wii? Nintendo has amazing second party developers, and they could be used to fill the huge gap that the lack of third party support will create.