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My thoughts are that a "360 class" console from nintendo for $400 WOULD kill Nintendo right out of the home console market. It wouldn't be able to get the install base because of it's price, which would also kill it's publicity, then it wouldn't get the 3rd party support because of the lack of install base, and in the end it'd probably end up worse than gamecube. IMHO Nintendo made the best possible decision they could overall.

Nobody is crazy enough to accuse me of being sane.