Nintendo did this to themselves. They cut a wildly successful and profitable generation short. Nobody has ever done that, and they did it twice. They shifted development resources away as well.
US PS2 Hardware Sales:
On its face, this can be made to look very scary. Despite declining every year since (except 1), even with price drops and whathaveyou, everything worked out fine for the PS2. Nintendo got some combination of paranoid and stupid.