First of, congrats on your first post. Sadly this thread will soon turn into a battleground.
Don't worry, many developers died when the PS1/N64/Saturn era forced 3D gaming. Of course many new developers appeared to take their place. The phrase is called "evolve or die."
For point A: The "hardcore" market is not shrinking, the "casual" market is expanding thanks to the Wii. There are many people who never played video games but are now using the Wiimote. Elderly folks in retirement homes playing Wii Bowling, old gamers who were about to quit games altogether (*points at self*), Japan (see Y-koron's editorials and market analyses) are three big examples.
For point B: No third party developer believed the Wii would sell. Remember? Before E3 2006 every market analyst predicted a tight battle between the X360 and PS3, with the Wii in a distant third. Everyone but Ubisoft ignored the Wii. EA in particular was ready to ignore Nintendo consoles altogether until they saw how well the Wii sold at launch. So no developer had games ready for the Wii. Except Nintendo (and Ubisoft to a 2nd place extent.)
So only two developers were prepared for the Wii. Obviously they will make a profit. The other developers have to adapt or they will continue to miss the boat.
Anyhoo, I'm sure this post is buried in the middle of the thread and will be ignored. So I just want to say WELCOME TO VGCHARTZ!
There is no such thing as a console war. This is the first step to game design.
