I am getting annoyed by MS.

[bdbdbd]

@Alby: Well yes. Sony and M$ made big mistakes in trying to sell tech to consumers, when the consumers weren't interested in tech, this left the market wide open to disruption. Of course, if PS3 and 360 had been reasonably priced, they'd have sold better.

I think we should first look why M$ wants to destroy its competition. It's because it wants to eliminate the competition, since they aren't very good in it. They just try to run the competitor out of money, by using their own cash. M$ only follows the "market leader strategy", which is to copy every advantage your competitor has. Now that Sony is behind M$, they try to copy everything Sony has over them. Nintendo played their cards better, so M$ has much harder time copying Nintendo.

Basically the way Nintendo fights, eventually leads to competitors destruction too, but it's not what Nintendo is after. It's enough for them to drive the competitor into a niche, when they control the segment below the "high end" market. Of course, i doubt they expected in the beginning that Sony would price themselves out of the competition.

What Nintendo does first, is to get new audience for the machine and get their fans to buy the console. In other words, target the blue ocean audience, where M$ and Sony doesn't have a foothold and aren't really interested in it.
After that, they aim for the new audience to buy more traditional games, to get them moving to upstream.
Then, Nintendo moves upstream by releasing more of the traditional core games on the system and using the blue ocean audience to have strong software sales to get 3rd parties to jump Wii.
Eventually, if the competition can't counter, they retract into a few genres that can generate decent profit.

If we go further and look at what next gen might bring us, i see three possible scenarios:
1. Nintendo tries to disrupt Wii.
2. Nintendo tries to disrupt other forms of entertainment.
3. Nintendo tries to disrupt Micro$oft.

Since Nintendo failed the transition from NES to SNES, they aren't going to just move up next gen and wait for the audience to follow.

With number 2, they likely get number 1 with the same shot and number 3 depends on what kind of deals they make with 3rd parties, such as Google. Google likes to push web 2.0 and Nintendo seems to have high interest into online, considering how online orientated platform Wii actually is. Also, M$ is limited in online offerings as a defensive measure, since it would lead themselves to start running down their highly profitable core business, which Nintendo would attack.