Matt Presta tells Gizmodo the story:

We were brought in to help [Gyration] pitch their gyro technology (which had previous only been used in pointing/mouse devices) to Nintendo for more complex use in gaming—an idea way ahead of its time back in '01.

Based on a requirement to roughly preserve the existing Game Cube button layout we created usability concepts that would work for one- or two-handed gaming. We experimented with different configurations through sketches, models and interviewing various hardcore gamers.

Gyration decided to hedge their bets choosing the quick-release idea as it could work for split-handed gaming without shaking up the already old-fashioned two-handed controller paradigm. We weren't party to discussions between Gyration and Nintendo so we don't know exactly how Nintendo arrived at their solution.

It would have been fun to take the project further than just a rough usability prototype though. It is cool to see that at least Nintendo finally decided to take the huge risk in developing the current (ambidextrous) Wii controller.

BTW, for the record most of us designers support you lefties out there. Unfortunately the business world often decides that ambidextrous attributes aren't worth the effort.

Thanks to a recent chance encounter, we were able to uncover a couple of PowerPoint slides that showed the GyroPod, a prototype design for a one-handed motion sensing controller designed specifically by Gyration for Nintendo.

Here's the back story: Gyration is a company that holds most of the best motion-sensing patents. Nintendo licensed a number of those patents from Gyration in 2001, and brought the company on board that year to develop a one-handed controller. (Nintendo even became an investor in Gyration, which is now owned by Thomson.)

In one of the first meetings with Nintendo's people, Gyration designers brought these animated slides to the conference room. I am a fan of the breakaway handle, and some of you may appreciate the fact that the controller forms one solid piece when connected, rather than the current Wii-mote and Nunchuk setup.

Slide 1:
Still, you can't argue that even Gyration understood the new world that was opening up with one-handed motion. The following game slide depicts only the most obvious action, and doesn't come close to foreshadowing the greatest game of all (IMHO): Wii Tennis. (Maybe that's on a missing slide?)

Slide 2:

Animation frames from slide 2:

Thanks Greg and Zac!