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scottie said:
Is anyone here surprised by this?

It's called the Blue Ocean strategy. You start with the expanded audience, and then head upmarket. Being as you have a solid foundation in the Blue Ocean, your competitors will be unable to compete and will be forced further upmarket, which in turn gives them less ability to compete next time Nintendo tries to push them further

This.

It'll be interesting to see what WM+ delivers too.  If you can do the games we all envisioned when Wii first came out properly with WM+ (like true 1:1 lightsaber fighting, etc) that'll get even the 'hardcore' to buy Wii for it's unique appeal.  But even without 'violent' games that the so-called 'hardcore' love Wii is crushing the competition so I don't think they are overly worried about it.  

Also consider this - how many publishers of those 'hardcore' games have posted profits?  Activision off the back of WoW and GH but very few others.  HD graphics development costs are killing this industry.  It needs to reinvent itself.