Patent infringement can sure be expensive (although $21 million is probably just chump change for Nintendo these days). In any case, Nintendo will have to pay up, since the company was found guilty of the crime by a federal jury.
The issue stems from the technology in the Wavebird, Classic, and GameCube controllers, which led Anascape Ltd. to sue Nintendo in 2006. Anascape also named Microsoft in the suit, but the two companies reach a settlement before the case went to trial.
Nintendo will be appealing the decision, though, in the hopes that the sum will at least be reduced.