Is a market crash imminent, or have videogames become a self-sustaining industry? As other industries have shown, at some point you don't need to be innovative anymore. The biggest movie series of our decade (maybe even our generation) is the Lord of the Rings....based on a trilogy of novels that are 50 years old. That's not to insult the films, I love them, but there isn't much "innovative" about them. Harlequin Romance seems to release dozens of new novels each month; for that matter, some of the cheap sci-fi series' aren't much better.
I think it's true that videogames will soon reach a point where graphics and sound have nowhere else to go...at least not in the minds of casual observers. I know computers can always get better and faster, but will people pay $400 for a new console that's like going from Toy Story to Toy Story 2? I think maybe the industry is headed for a clean-up, but not a real crash. The casual market will shrink a bit, settling for older consoles until they're broken and not bothering to purchase many new peripherals or games. I also think hardcore gamers like us may become more specific about the games we buy as the product becomes more stagnant, but I doubt very many of us are going to quit buying games just because they aren't super-innovative. How many people here plan to buy Paper Mario 2 or Metroid Prime 2 this Christmas?
Oh yeah....so umm, should Nintendo make movies? I have to agree with Ian that this risk is a lot bigger than taking Nintendo games online...and I don't see a movie of Japanese poetry doing all that well. Maybe in Japan it would. I think it could be an interesting venture for Nintendo but I feel that the company needs to see through the current battle for the handheld gaming market first.