Actually I could see Nintendo surviving even if I lose the bet and heres why.
It seem the general consences(sp?) is that Nintendo's super-hype machine(shm), an exponent of 2 better then there regular hype machine, won't go into effect until after or near the console release. This may not be the case. I think Pale could win and Nintendo could do fine IF they start the shm early enough. Yes, I think an Oct. 2 launch would be ideal but this is not what this is about. If Nintendo can leave a very long shadow with its shm starting say September they could reach saturation by the time Sony's shm kicks in. Once the ground is saturated it takes no more water.
Nintendo has actually started a good foundation for this. Most people you talk with are generally excited about the Wii. While Sony,
well.... This is a good position for Nintendo. The only thing hurting it is the lack of interaction after a good E3 showing. After the September announcement Nintendo needs to go and spread the word. The Fusion Tour is not spreading the word. After the announcements we should be seeing interviews in places like Times and USA Today. Get Dave Ramsey or Oprah Winfrey to try it. If they enjoy it I'm sure many will be curious. Get Wii demo units or just propaganda into common places like the post office, electric company, banks, etc. In fact see if you can get a famous Virtual Console character stamp series going with them all doing something with the Wii. Cereal giveaway things. Kids Meal toys. Cola. You get the point. The idea is that everyone knows about and when something comes up about the PS3 it will be "but what about the Wii?". People like what they know.
Simply put if Nintendo can generate enough momentum outside of the normal crowd they could pull it off. If they could further the stereo type that the PS3 is for the Snooby rich kid. That would help to. Something they should avoid is trying to sell the Nintendo name and their past successes. The Wii should be advertised like its the only thing they got. Not reference the others for strength. Fact of the matter until its release I advertise the VC as having past games and not be specific in any way shape or form. I leave that for after the initial launch. I'm going to end this here I can't thing of a good ending sentence ;p