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Quite simply Nintendo is trying to capture the "hardcore" crowd that spend many hours playing online with shooters etc while Microsoft is trying to capture the "casual" crowd that may play games in short burst etc.  I know it is generalizing but trying to keep this short. SONY on the other hand is simply in the mix still trying to do both at the same time.

In case some people need it spelled out, Nintendo already has the "casual" crowd so it would make sense they go after the "hardcore" gamer in the same way Microsoft already has the "hardcore" crowd so it would make sense they go after the "casual"crowd.  Basically they are both putting all of their resources into the audience that they are missing so that they can expand their installed base.  SONY on the other hand is quite honestly stuck trying to cater to both at the same time which limits how effective they can be.

I would think that 5 years later it would be a given that Nintendo has the "casual" crowd and Microsoft/SONY have the "hardcore" yet this ridiculous battle goes on still.  Microsoft nor SONY need to try and get more "hardcore" people because if by now they haven't bought one of those consoles then would you really consider them 'hardcore'. Basically "casual" games can easily and readily be found on the Wii/360 and the "hardcore" games are available on the HD systems which will in the future include Nintendo (I know the Wii has "hardcore" games but bare with me for the sake of argument).

So basically Nintendo is working towards getting the "hardcore" with their new console while Microsoft continues to work on the "casuals" with Kinect while SONY is working on 3D...

Seriously SONY really needs to get a better focus on what they are doing.  3D at least in the United States is still far from mainstream and even SONY's solution is still too expensive. Not sure how they can justify 69.99 for a pair of 3d  glasses as a bargain.  So basically only the person who bought the 3D package will see in the 3D while his/hers friend watch blurred pictures unless their friend has money to spare and buy additional glasses. They need to stop wasting their resources on the hardcore because it is a given that they will come (All the top franchises will forever get sequels, it is an endless video game cycle) not just from them but all the third party publishers will have all of their AAA games on the PS3.  They need to focus on MOVE and make games that can ONLY be done on MOVE though that may be a hard to do since I can't think of anything that the Wii can't closely mimic.  They need to revamp the dashboard even if the current one is fine just so that people get excited about something new. Rearrange it so that it is more user friendly and incorporates the MOVE to make it even easier instead of just copying what a regular control would do. They need to really showcase what an awesome media center the PS3 is and quite honestly forget about Blue-Ray as streaming is where is at.

Feel free to discuss and as a final quick note, Exclusives are overrated because the top selling games of this generation not made by Nintendo are all from third party who will make it available on all the systems that can handle the game.  People need to stop using that as an excuse as to why one is better than the other as all systems have at least 1 awesome game in each genre that is exclusive to them.