Sony is on a great run currently but their sun still rises and falls with Square-Enix, Konami and Capcom. Would those companies ever to be to jump ship, Sony would lose a lot of their market muscle. Microsoft has already lured away Hironobu Sakaguchi (producer of Final Fantasy 1 through 10), so who knows what they can accomplish in the future.
Nintendo has always been a company that if nothing else, knows how to make money and lots of it. That article had some good points but they put them totally out of sequence (eg. talking about licensing issues in the middle of nowhere, no mention of the heydey of SNES and the four years where Nintendo and Sega flip-flopped for >50% of the market, etc. In the article they go straight from the NES to the Virtual Boy to make it look like Nintendo was a one-trick pony and then went straight downhill after that.
The N64 did bite them in the @ss for being late and not having an optical disc drive (hence no FMV for games and no redbook audio sound), as did the infamous backstab with Sony (the ultimate bit of divine retribution against Nintendo, with Sony releasing the Playstation a couple years later). An error in the article is they seem to imply the CD drive was to be for the N64 or a next-gen system; originally it was licensed from Sony to be an add-on to the SNES, like the SegaCD for the Genesis.
The licensing issue did finally catch up to Nintendo when companies such as Square-Enix and Konami jumped ship after the SNES era; Nintendo was making huge profits on each game sold and did indeed have a restrictive license policy; however this is what ultimately allowed them to build up a sizeable cash reserve that Sega, with their lax licensing, never could match.
Still, with all of Nintendo's foibles, I can't help but feel that the Revolution has a chance to be a solid system. For the first time, Nintendo is accepting the fact that the battle for them is not to be #1; their battle is to be a strong #2, and after much reflection, I think a $99 or $149 Revolution hits a very sweet pricepoint, equipped with a souped up Gamecube for its guts (it's basically a Cube with double the CPU and GPU clockspeed, slightly improved caching and an upgrade from 24MB of 1T-SRAM to 64MB of (faster?) 1T-SRAM). Since the hardware is essentially 'Cube on roids', even at $100-$150 they should be losing much less money (if any) compared to the Xbox360 and PS3; certainly until both next-gen systems get to benefit from a die shrink to 65nm (planned for 2007/2008) and lower costs on some of the components.
Personally I felt that graphics of some games this generation (Zelda: Wind Waker, Metroid Prime 1 & 2, Resident Evil 4 if it were possible at 480p instead of "fake" widescreen" (which it would be on the Revolution) ) reached a plateu that I would consider "good enough." If Nintendo puts its developing chops where its mouth is and works on actually making the best, most fun games, instead of producing more attractive but lame (eg. Mario Sunshine) pseudo next-gen titles, I think the big N will get a lot of sales. Their strategy of doing more with less has been successful in the handheld market, where 2d games are thriving to this day, and I think if Nintendo really focuses on maximizing what they have (eg the mouse-like precision granted them by the Revolution controller - read up on how it works), then Nintendo will improve from their situation in the Gamecube days.
Personally I felt the Gamecube was a solid system; Metroid Prime and Resident Evil 4 are better than anything I played on Xbox aside from Halo 1 and 2, Wind Waker was ok (Twilight Princess looks like it's going to be great) - but Nintendo didn't sell the system very well and was always perceived as the market follower.
With N finally cluing into the fact that that three $300-400 systems just isn't feasible in today's market, a $99-149 Revolution makes a lot of sense; the Gamecube ultimately found its niche as the "second" or "complimentary" system to your system of choice (either the online gaming of Xbox or the superior single player games of the PS2). Everybody seems to be short selling the Rev. these days, saying stuff like 'it's not even worth $200,' etc. I think the games will decide whether or not the system is indeed worth it, and I look forward to seeing what Nintendo has up its sleeve, in this, probably their most desparate hour.