Like Teon and Carlo have mentioned, it's not marketshare, but profit that keeps a company alive. I remember a couple of years ago, the only two major pc companies making money were Dell (with ~30% of the market) and apple (with ~3%). Apple makes money through innovation, dell makes money through the walmart business model: Undercut the competitors. (If this sounds familiar to anyone, I'm totally ripping off one of steve jobs macworld sf keynote speaches).
This is similar to the console market. Nintendo is still the most innovative, and they know how to make a lot of money. They're the only company that (at the outset, at least) made money on the actual sale of the console in this generation. They sold the GC at a cheaper price and still were making money on the sale of each console. The Xbox business model relies on 4-6 games being sold for each xbox sold in order to make money. This is also the reason why releasing the LE xbox's is not good business, at least in the US. That's also why MS would be displeased if everyone bought a second Xbox, because they'd lose money.
In the end, it's not who has the most marketshare but who has makes the most money that will stay alive. Nintendo is very profitable because they know what they're doing, and as long as they can stay profitable they'll do fine.
They have admitted they've ignored a part of the older market and they're looking to rectify that with the Revolution, I'd imagine. Also, it's gonna have wi-fi built in for online out of the box. I think (and desperately hope) that Nintendo is starting to wake up.
E3 will be interesting no matter what we see.
