Well, yeah, Nintendo have saturated their own market, so it's only now that their revenues have taken a hit.. However they sold the Wii at a profit right from the get go, and it was their intention to make money on console sales. They didn't ever sell at a loss like MS and Sony. Only now is MS in the black with the 360, and Sony are still making dreadful losses on the PS3.
MS and Sony never intended to make money on the actual hardware, they do much better through software sales (and online revenues through Live and PSN, and DLC), giving them a much more reliable revenue stream. The Wii has fallen flat on it's face in this respect, and shot it's load so to speak in the first few years when demand for consoles was ridiculously high (and made artificially high by Nintendo). Demand for software on the Wii has never been high, though. Hopefully Nintendo now realise they cannot afford to ignore the hardcore. These are the people that buy games every month, not just stick with Wii Sports which came with the console.
Anyway, the real star for Nintendo has been the DS. That's the real money-maker for them.