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The wii isn't going to fail.  The 360 will, its market share has been plummeting lately, while the wii just goes up.  

 That being said, while the wii might just win the battle this round, sony has a lot of aces up its sleave.

-Home.  Need I say more?

-Better games coming out

-Improved playstation network

-more sales from Blu-ray users (movies)