That is brilliant! Absolutely perfectly targeted towards the intended audience. And it doesn't need serious tech. Sony could have probably managed this with a Sixaxis, but they wouldn't think to try. Nintendo desrve their success because they are bigger picture thinkers, thinking about implementation as well as tech. Same as Apple.
I just watched that video 3 times in a row. Its possibly the most innovative use of the Wii mote I have seen and it simply looks like it would work without fail. It could be the dawning of a new product line for Nintendo... Wow oh wow!
So what do you think it could sell? I think it could clear 5 Million with no problems... and probably sell even more Wiis to parents in the process.