The Nintendo Wii certainly changed the perceptions of a game console for many people. The Wii focused more on the controls and game play than on fancy graphics and found great success. The motion controls of the Wii also sent Microsoft and Sony looking for similar tech.
Sony integrated motion control into the original PS3 controllers, but it was far from as cool as what Nintendo offered. Microsoft has its Project Natal control system coming this holiday season. The project Natal tech uses a camera to sense what the player is doing allowing control without actually having to use a controller.
A new rumor is surfacing from a "highly-placed insider" that claims the tech behind Microsoft's Project Natal was first pitched to Nintendo in an early form back in 2007. Nintendo turned the tech down. After refining the tech, Microsoft purchased it. The original form of the tech Nintendo passed on was said to be too expensive and lag-prone for Nintendo to consider.