Ok, hear me out on this one. Back in the day, Nintendo was very interested in having the most badass gaming systems. The Super Nintendo was a technological powerhouse for it's time, and the Nintendo 64 was also a very high-end, technologically advanced system. Yet it seems that after the N64, Nintendo decided to step away from trying to be so technologically advanced with their hardware. The GameCube, while a relatively decent system overall, was quite a bit underpowered compared to the other system that came out the same month, the original Xbox. It was a year after the arrival of the PS2, so you'd think the GameCube would be considerably more powerful than the PS2, but they were pretty close in terms of graphical fidelity.
Then, obviously with the Wii, an even bigger departure from having a technologically advanced system.
What made Nintendo decide to no longer compete in the raw power category? They definitely were top dogs during the 16-bit and 32-bit era's, cartridge format withstanding... Certainly, the lack of graphical fidelity on the Nintendo Wii hasn't really hurt them in any major way, profits wise, but I just think it would be cool for Nintendo to return to their former technological dominance. I just don't think it's ever going to happen again. I'm guessing this is mostly due to the arrival of Sony into the marketplace. Nintendo probably feels that their engineers can't compete head to head with Sony, so they might as well not try to win a battle that would be impossible for them to win, so instead, they go with a low-tech strategy.