Every time I read one of these "OMG!?! What is Nintendo doing?" stories, I get a good chuckle. Nintendo is still doing what they are good at, and will keep on doing it. I don't think their 'strategy' is so revolutionary. Casual games are HUGE on the PC. They are just going with the flow. They are expanding the console market by making fun, easy to play games. Do you think the casual gamers who buy the Wii are gonna turn into hardcore online FPS players? Probably not. They are expanding the market, but the people they are picking up are people who wouldn't have bought a 360 or PS3 in the first place. I bet they won't in the next generation, either.
For all the people who thought the Gamecube was a failure, keep in mind that Big N made money on every one they sold. They aren't a big conglomerate that subsidizes the cost of their bloated hardware, in hopes of making money off the games. They make money on the systems and the games.
After they got their asses handed to them by Sony and the original PlayStation, They found their little corner of the gaming market and keep expanding it slowly while still turning a profit. What about the GBA? It WAS the hand held console of the last generation. There were some others, but they aren't even worth mentioning. While the Gamecube was seen as a failure(which it wasn't, IMHO), the GBA sold like hotcakes for years. The DS already beginning to repeat that success.