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Groucho said:

Let me avoid the sarcasm for a post, to see if I can stir up some thinking.

Presumably, people who purchase Wiis buy them for the existing software library. The masses could care less about "The Conduit" and its ilk -- primarily because of the simple fact that they have not yet been released.

Also, individual Wii purchasers do not seem to be interested in standard-fare shooters, pro sports games, etc., to the same degree that HD console owners appear to be. However, they love games like WiiSports, WiiPlay, WiiFit, Carnival Games, etc. I think this is pretty obvious from the sales numbers.

The Wii and the HD consoles clearly cater themselves to different gaming genres. They are all video game consoles, without question. However, since game players tend to gravitate toward particular genres... is the Wii really "competing" with the HD consoles in the same sense that the HD consoles compete with each other?

People buy consoles for the games. Ponder that for a while, and I think you'll have a better perspective on this (obviously a HD gamer) author's article.  In his mind, they don't compete.  This is his opinion, and it is shared by many HD console owners.  Stepping back and asking "Do I like the sorts of games the HD consoles provide in spades?" and "Why aren't these games on the Wii?" should provoke some contrasts between the consoles.  Popular to contrary belief on this site, 3rd party publishers are far from "dumb" -- they do look at their demographics, pretty intensively.

Yes, they compete.

You're saying that the Nintendo and HD consoles have different demographics; I agree, and I don't think anyone would seriously argue the point.  However, they still are both trying to get limited resources: products designed by third parties, media attention, space on game store shelves, and, most importantly, customer's money.  The question is: if a customer spends money on a Wii, does that mean that PS3/360 loses out on a sale?  Not always, not 1:1... but sometimes, and often enough to say that: yes, they are in competition.

As a pure anecdote, when I decided to buy a Wii, I decided to purchase it instead of a PS3.  I'm a life-long gamer with interests in many different genres of gaming.  But I have limited resources (not only money, but also time), and I had to make a choice.

Therein lies the competition.