I wouldn't bet on it being a flop. In my opinion, the only unsuccessful Nintendo console was GameCube. NES, SNES, N64, Wii, all a success. PS1 was a success, so was PS2. I'm not really convinced of this industry rule you're talking about.

Wii reached an audience no console ever reached, thanks to the titles and controllers. I'm betting Project Natal will take over a big slice of that market, unless Nintendo really steps it up.