The thing I like about Nintendo and Sony's strategy is that Nintendo shunned CDs at first because console prior that used CDs failed miserably and Sony was ridiculously successful with the PSX), they also ran with up-to-date but not as powerful hardware while Nintendo was running with powerful hardware. Even though the N64 didn't do as well as the PSX, they management to make money still. With the PS2 Sony took the same approach, Nintendo put out the GC which used mini-discs and loaded faster (due to less data to read) and powerful hardware (outclassed by the Xbox), but it was a repeat of the N64.
Sony changed the plan with PS3 to compete with Xbox 360 and it was like they took Nintendo's playbook. Nintendo took Sony's that time and got it right with the Wii. While everyone was going on about powerful consoles--which few bickered about with the last two generations--they forgot that the last time the most powerful console took the sales at that time was the SNES over Genesis.
This time Sony went back to their playbook. Keep It Simple Stupid has rarely never worked.