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I don't really see the effect of a $199.99 Core being all that great.

For most, it's still going to be seen as handicapped. For the casual market MS is trying to target with it, it doesn't have enough casual games to attract them or to keep them coming, so the Wii is still going to be seen as a greater value.

 

Consoles owned: Saturn, Dreamcast, PS1, PS2, PSP, DS, PS3