Certainly Nintendo should strive to make an appealing console and launch it at the same time as Sony's next console. Even if Sony designs a great system (more on that later), the Nintendo fanboys alone should gobble up initial shipments and get hardware moving. Then the console will be moving on word of mouth rather than rumor and hype. At that point, Nintendo just has to make sure the good games are there.
The real question is whether or not Sony manages a good launch for the system. They very well might. On the other hand, they might flub it. Remember the PS2 launch? There were shortages, first generation machines were liable to break, it was hard to develop for, there were only two controller ports and the software lineup was none too dazzling. Imagine what would have happened if the Xbox with Halo had launched at the same time (ok, so it never would have happened, but just for the sake of argument). The PS2 might have still survived on its name, but Sony would have gotten a pretty big black eye.
If Sony gets a solid launch, then its name in the industry may very well make it impossible to beat (although competitors may come close). But if Sony drops the ball, there will be a very different story.
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