Yeah, being first to the market with a new generation console isn't necessarily a good thing, as Sega have proven so many times.
Nintendo really need to attract third party developers to their system- that's what it all comes down to.
People argued that it was the difficulty in programming for Sega's multi processor systems (Saturn) that lead to its demise, but sony have proven that theory wrong with the PS2.
Having the most powerful system isn't enough to win the battle, either, as sony's last two products show.
It's all about third party developer support.
Sure, everyone loves Nintendo's classic series (Mario, Zelda, Metroid, etc) and not many people would argue against the fact that their games show a level of polish unseen on other consoles. But the fact remains, how many revisions of these games can people play without looking for others to add to their collection.
And if that's all that's available, it doesn't make for a very appealing console, does it?