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.

I can understand the basis of your claims by what you have perceived. It is evident that Microsoft is trying to push lots of resources to casual gamers as evidenced by many of the Kinect titles and marketing. Im calling it now that Disneyland, and Seseme street Kinect are going to be HUGE hits this holiday season with moms and kids. Even though I have no interest in those titles its obvious they are full fledged casual titles for kids and their parents. As of now it appears they are keeping a small base of popular exclusive hardcore games. This includes: Halo Franchise, Gears of War Franchise, Forza Franchise, Fable Series (seems to have lost some of its appeal recently), Splinter Cell series, newly created Alan Wake series, and a handful of other minor exclusives. It recently was reported that Microsoft has created a number of new studios that are developing games. It could be that they are creating new major exclusive fanchises, but no one really knows. All we know is that it seems to be Microsoft's exclusive hardcore titles has diminished somewhat since the Xbox 360 was released.

Remember there were some great exclusives for the x360 that are no long exclusive such as Mass Effect, Saints Row, Dead Rising, among some others. It sounds almost as if Microsoft is dwindeling down their exclusive offerings to a handful of big name hits for their hardcore gamers in order to streamline what Xbox 360 is known for, and to make room for the casual genre via Kinect. It appears Kinect has grown a few very popular hits of its own for the casual crowd in the; Kinect Sports series, Dance Centeral series, Your Shape Fitness series, and some new titles such as Ryse by Crytek, and Star Wars. It appears Microsoft is trying to be more focused with certain franchises that go along with all the other very popular 3rd party title offerings.

Will Kinect catch on to the casual gamers? Well, in some senses it already has, but mainly in United States and a little in Europe. Not really at all in Japan of course. It has not however grown its casual crowd like the Wii did, and I doubt it will be able to achieve that much in the casual realm of gaming, but it is making an impact non the less.

I think Nintendo is definately trying to capture the hardcore crowd back, but with the Wii U it seems that they are still trying to hold onto the casual market of course. From what I saw a lot that was demonstrated was casual games. Im aware they also announced a handful of popular 3rd party hardcore titles, but Nintendo has their work cut out for them I think in the hardcore crowd. I believe they can do it, seeing as how effective they have been in many things they invet/market. My concern as everyone else will be the cost of Wii U. Indeed if a family in a home wants to have 4 players then of course they will need to buy four of those controllers(EDIT UPDATE: I have read some articles saying Nintendo plans to have one screen controller and other players use a wii mote to connect through the screen. I can see where this cuts down costs, but still not sure how that will work with one player having a screen. Its becoming more evident that Wii U is still in development stages as Nintendo trys to figure out their strategy of the system. I think we will remain a bit confused until we see its full reveal likely late this year or next E3 depending on release date.). No question about it those controllers are going to be very expensive. Much moreso than a standard x360/PS3 controller. I think I need to see more from Nintendo than what I have already to make certain assessments. So far I am  more confused about their approach/agenda in the Wii U. It is evident they are still very much in development stages and questioning themselves of how to market it. I will admit though Wii U looks like it can have a lot of potential. Im just not conviced it will attract the hardcore crowd that much yet.

As far as Sony goes It is evident that their main focus is primarily on the hardcore gamer. They have created numerous new exclusive titles just in the past couple of years. However, no one can say any of their titles comes close to the popularity of Halo, or Gears of War Besides Gran Turismo, but however the God of War series, Uncharted Series, LBP series, and Killzone series are getting closer. It is evident now that the PS3 when compared to Xbox 360 has a larger volume of exclusive titles, however they do not yet match the popularity of some of the big name Xbox 360 exclusives. I honestly cannot look at the PS3 and put their identity to one or two exclusive titles. I may say GT, but to me their identity is clouded by a handful of somewhat popular titles. If you would have asked me last Gen I would have said Final Fantasy,  GT, and GTA. But now Final Fantasy and GTA are multiplat. If you were to ask me what popular casual games PS3 has I would barely be able to name a few. If you were to ask a mom of a PS3 owner she may say LBP, or Ratchet and Clank ( I may be forgetting one or two but you get my drift). If you were to ask a Mom of a Wii owner she could probably name at least 10. Now if you as a Mom of a X360/Kinect owner she could probably name at least 5. PS3 seems almost exclusively hardcore to me, and dosn't seem to really be pushing to capture any type of casual market, which in the end I think hurts their potential somewhat. They already have a huge following of hardcore gamers and I would argue its probably more than X360. But even though they may think they offer somethign to the Casual gamer, its not enough to get them to buy their system in a large quantity.

So in large part I do agree with the OP on this analysis, but with my take on a few things.

I think that you are generalizing a bit too much, but all in all I agree with you. I'm a bit tired of all three pushing what they think everyone wants. It's pretty simple to me. It's games, and good ones. I don't care what peripheral I'm playing with, I want to have fun. And I don't want to sacrifice visuals so that I can waggle this, or wave my arms at that. Sony is pushing 3D as hard as Microsoft is pushing Kinect. Nintendo is on their own weird path as usual. I know I'm rambling a bit, but man E3 was just deficient of what it usually has. We just want great games, not a company pushing their version of how gaming should be played.

So because Nintendo is going after the "hardcore", and Microsoft is going after the "casual" they are going in the right direction. But Sony who is trying to do both isn't? And the main reason why is you don't think they can be effective at it?

Its funny now that Nintendo is going after the "hardcore", they are going in the right direction and not the wrong direction like Sony and Microsoft were when they launched.

And exclusives do make a huge difference, what would Nintendo be without Mario or the Wii lineup? Where would Microsoft be without Halo or Gears of War. Where would Sony be without Uncharted and Gran Turismo? So to say that exclusives are overrated is ignorant.

Well, Sony is capturing both and it's working!

They have reduced the lead between 360 and PS3. That way they wont abandon hardcore or casual gamers like Nintendo and MS have.

MS is focusing on Kinect and forgetting about others.
Nintendo had focused on Casual in the Wii, so even 3rd parties Had abandoned them.

Microsoft have forgotten about the core?  Halo 4, Gears of War 3, Forza 4, Halo Anniversary, and the countless core multi-plats disagree with you.

Microsoft is focusing however on the casual more than the core at the moment but that's not really a big deal.  Like the OP said they already have the core now their trying to expand out their fanbase.

Back when the Wii was released, none of us thought that it was to be a CASUAL system since that fucking word wasnt being used until SHORTLY AFTER. I do not remember hearing that BULLSHIT of a word outside of PORN. The Wii line up in the beginning looked like it was getting core support, with a few party games and such put into the fray. Then suddenly, after knowing that a lot of third party bullshit that they put on the Wii flopped, there were no longer enough core games being made on a yearly basis. The direction they took was more of a less powered system compared to the competition to reduce dev costs which was supposedly a reason for third partys to go to their system. Oh and lets not forget about the horrible image nintendo had since the N64 toward third parties.

I'm glad that Nintendo is going in the "core" direction with decent to amazing third party games coming to the system, with a handful of party esque games. The question is, will Nintendo's image change when people see what they have to offer? I'm expecting more new third party games that cannot be done on the ps3 and 360 by the end of this year to be announced. But of course, It's nintendo so they might get screwed over again.

3rd parties had abandoned Nintendo long before Wii. Though it was not intended to be so, Wii was a big middle finger to them for years of screwing Nintendo over, and well-deserved

QFT

Sony lost a lot of it fan base at the end of this generation due the high price point and Wii success.

But now (after 2009) Sony is capturing both (casual and hardcore) and is having success with it... currently the best market position is with Sony.