This is another misconception...there were just as many proponents of the X-BOX as there were naysayers before launch. The original lineup of anti-X-BOX naysayers were basically Nintendo fans like myself or the occassional guy who was against the Microsoft "world domination plan". But just as much there were tons of PC gamers who could finally stand up and say PC gaming was better than console gaming as well as alot of people who got burnt on DreamCast who looked at Microsoft as a company who wouldn't abandon their system 'cos they have so much money. As far as gamers go, this is how it was before either console was even officially unveiled.
If you're talking about the press then you would be wrong there too, 'cos while *some* reports were going out on a limb and saying MS would have a hard time being the newcomer most reporters were pegging X-BOX as second place already and even to this day they ignore Nintendo's efforts...why...'cos MS is big and has LOTS of money, power & influence to sorta buy that mindshare. Add to the mix that mainstream press veiwed Nintendo as old, washed up and the next Sega (the plug being pulled on DC hurt Nintendo alot 'cos it gave the impression that Nintendo was next). If you're talking retailers then I'd disagree there too...Microsoft (due to their size and this being their first time in) was WAY more willing to give kickbacks than Nintendo was, plus alot of retailers disliked the N64 so Nintendo's next system really seemed "less than" MS's first time effort. Then if you're talking about publishers/developers who are they gonna side with...the guy with tons of cash willing to spend spend spend to make a name for themselves or the guy who's past record (despite him trying to change his ways) left a bad taste in their mouth.
Then project "Dolphin" was unveiled as the GAMECUBE. Really a marvel...too bad people couldn't look past it's odd shell design and lack of DVD. Nintendo really needed to make a serious looking machine, but instead most people saw a toy...Nintendo fans included. Nintendo sort of ignored MS as any sort of threat and tailor made the GAMECUBE for the Japanese audience...the problem with this is, while it helped for gaining footing in the homeland, it hurt their already hurting image in the west. Still some Nintendo fans stayed loyal and vowed to get one at launch and Nintendo was to make some big announcements with top Japanese third parties to stab at PS2, but Sony sorta thwarted these efforts.
Then, the X-BOX was unveiled...more powerful, more features and most importantly...more serious. I know alot of Nintendo "fans" who pretty much switched alegiance to MS 'cos they were disappointed with the GAMECUBE unveiling. MS unveiled the X-BOX in the right way and at the right time. This coupled with the previous DC burn victims, PC gamers who were already onboard the MS bandwagon then add the press, retailer & publisher support and it's a wonder that with all the money MS poured into this project they haven't destroyed Nintendo already. Then MS's calculated aims at being the "new N64" for Tom Clansey games, FPS's, Star Wars games and of course, aquiring RARE then it's no wonder alot of Nintendo fans switched alegiance.
But some Nintendo fans stayed loyal and I would say they would have to be VERY loyal at this point 'cos of everything that we went through. You say that Nintendo having the Mario & Zelda IP's should somehow instantly trump X-BOX? But let's look at what Nintendo did with these IP's. Mario wasn't even a launch title...This, together with the toylike GAMECUBE design made Nintendo a limping "old-timer" to most when it finally came out. Having no Mario at launch was shooting themselves in the right foot, but unveiling the cel-shaded Zelda was a shot to the left foot. Nintendo hurt themselves more than Microsoft did.
Hopefully next generation they'll realize that they have TWO competitor's now and that they need to make a serious machine instead of a silly toy, they also have to have a Mario at launch and give themselves a more serious presence with the press, retailers and publishers/developers, they also most use ALL of their franchises the right way, in moderation and at the right times, unlike this generation. MS (and the rest of this industry) is probably expecting Nintendo to keep shooting themselves in the foot, but I think Nintendo is waking up to their own mistakes...MS spent alot of money to barely "beat" a limping/wounded Nintendo, but Nintendo is showing signs of wising up to their mistakes.