There's a mixture of factors including positive moves, mistakes, and even counter measures to mistakes, in every generation.
A nice example of countering mistakes would be Sony taking advantage of the CD format to really push low-priced "best seller" games. In my memory, at least, discounted best sellers were not a really common sight prior to the Playstation era - they existed, but they were rare. Thanks to Sony, $30 (CDN) games became a common sight. Nintendo was barely able to reach $50 CDN on N64 games and it probably would have preferred not to drop prices at all (see GBA - which got its first Player's Choice titles 3-4 years after launch.) It was a clever way to take advantage of the manufacturing costs Nintendo 64 games faced.
Similarly, the rising cost of game development has been all the talk of the industry for the past couple of years and Nintendo, being a major software developer itself, saw an opportunity to slash development costs by making Wii hardly more powerful than current systems. This has polarized hardcore gamers, but it is turning out to be a big boon in these early months. Imagine if it cost exactly the same to develop a Wii game as the other two systems: companies would be turning mostly to Xbox 360 because it has the biggest fanbase. Instead, Wii is being touted as the solution because it has a decent (and rapidly growing) fanbase and it costs less to develop for.
Spak: you're right, hardware matters, because it can affect how things go in the software department. It's important for the hardware to be designed with wise business targets in mind. In the case of PS3, I think they forgot about the consumers in its desire to focus on Blu-ray. In the case of, say, N64, I think Nintendo forgot about consumers and developers in its desire to create certain types of games. Avoiding load times and creating large-scale streamable worlds are noble goals, but who do they benefit besides Miyamoto and co.?