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To respond to the OP in two sentences:

1) The Wii can't destroy immersive gameplay, even if it somehow sets a new standards for consoles to have bad graphics (very unlikely); there will always be the PC to advance graphics.
2) It's not like if the Wii wins this generation, companies like Intel, IBM, and nVida will stop advancing their work; and these are the companies that are constantly working to push graphical capabilities, not secondary companies like Sony. Lol