Right around the time E3 was going on in the US, Nintendo's CEO Hiroshi Yamauchi retired after 52 years on top of the company. Shortly afterward there was a press conference held to talk about the state of the company. More great insight into the business of gaming, especially from Yamauchi who very rarely speaks in public. One particular quote of interest:

Developers can create exquisite titles such as Zelda or Final Fantasy, but when you compare our investment versus profit, we came out behind the Tamagotchis of the business.

I think this speaks volumes about the current state of the industry, and why Nintendo has been able to make as much money as they have. For as many original Playstation's as Sony sold, Nintendo still made more money off of the N64 dispite coming in a distant 2nd place. The fact that they understand what it takes to consistantly turn a profit in this industry is what keeps them in such a great positition over their competitors. And lets face it, they need that to compete against the Sony's and Microsoft's of the world.