I think that Nintendo failed to see the importance of system performance. A weak system means weak game logic as well. (not just graphics) Basically this is a limiting factor on how big worlds can be, how smart the AI is, and how fast levels can load. Of course there are many other areas of a game that this can affect, but you get the idea. ANY system can develop a special controller after the fact. Just look at the past: Dual analog for PSOne, Dance Dane Revolution Pad, Guitar Hero Guitar, Nintendo Power Pad, Dreamcast Fishing Rod, Neo Geo Mahjong Controller, Nintendo Power Glove, Game Boy Cartridge with Motion Sensor, etc. Note that Sony or Microsoft could at any time create a new controller if they wanted to. Motion sensitive or otherwise. What can't happen is to recall all systems and upgrade them with more powerful chips. The biggest system power upgrade Nintendo has ever offered is the memory expansion pack for N64. Other than that, it has been media add-ons.
The only mistake Sony made is initially offering a system that is too powerful for the time it was released. The Blueray disk drive technology + other features drove up the cost too high and caused problems with production numbers. Now, the price of the PS3 is actually a bargain for what you get, but to a lot of people it is just way too much to plunk down on a game machine. Once you start comparing it to the 360 you will see how the price is really reasonable. There are some areas where they did not flesh the PS3 os out enough like online play, but it just depends on what you need in a system.
The X360 has the best online experience right now, and also the largest game library of the three systems. The only area where Microsoft got hurt was their initial hardware reliability and the lack of a good warranty to back it up. Finally a year later they extend the warranty to one year. Come on, stand by your own product guys!
