"The Wii would be great if it had a hard drive and HD support."

[Borkachev]

If Nintendo met these requirements people would be saying "Wouldn't it be great if the Wii was as powerful as the XBox 360 and PS3?" which, if satisfied, would lead to "Wouldn't it be great if the Wii had an online service which was as good as XBox Live?" and then finally "Wouldn't it be great if the Wii could play HD movies?" ... When Nintendo met all of those "needs" people would be annoyed at them for producing a $600 console that has no games because they're simply too expensive to develop for a console with a "Gimicky" controller.

Come on, you must have a better argument than a slippery slope. Deal with those questions when they arise: for now, all anybody is asking is for a harddrive and HD support.

These two are not like the other things in your list -- they should be standard features at this point for any gaming system, because they enable support for what have become standard features in games. Harddrive caching, downloadable content, demos, standard modern TV resolutions: these aren't just nice little extras anymore, they're features we've (rightly) come to expect.

And don't confuse HD graphics with PS3/360 level graphics. Even the PS2 and the original XBOX supported HD resolutions--that's all we ask, but with slightly more universal support to reflect the Wii's supposedly enhanced power. This wouldn't have cost them much.

And the fact is, Entroper, is that lossleading is a poor strategy to run ANY business. At best it can be used to shoehorn your way into a field where you were once an outsider but it should soon be changed to a profit-making strategy once you're on the inside.

If not for Sony & Microsoft's millions & billions they could never compete in the gaming business. Nintendo IS the gaming business at the end of the day and these guys HAD to spend like that just to overcome that company. But long term as we're seeing that kind of strategy does not work.

Loss leading is not a poor strategy. It's a risky strategy, but one that can pay off in spades. Loss leading is what allowed Sony to absolutely clobber the competition (including Nintendo) for the last 2 generations. If the PS1 or 2 had sold at a profit from early on, they would be remembered as minor blips in gaming history. Instead, they were two of the most profitable systems in history over the long term.

Now loss leading has become the noose around Sony's neck, but that's because of a mountain of other mistakes, not the loss leading itself. They invested too heavily in expensive technology that hasn't proven itself superior, they came out late, they didn't secure enough exclusive 3rd-party support, their PR was a disaster, the list goes on. The combination of all these things made loss leading a poor risk to take, but without them it would have been a good strategy (see the 360, which made some of the same mistakes but to a much lesser degree).

This is the truth, as I see it: if Nintendo had chosen to lose $50 per system instead of profit $50, the Wii could have had a harddrive, HD support, and a lot more, and cost the same as it does now. Even if they'd chosen to break even, it would be miles beyond what we actually got. As it turns out, it wouldn't have done Nintendo one bit of good, since they couldn't possibly be selling more systems than they are now. But don't tell me it couldn't have been done, or that it would change some magical quality that would turn the Wii into something else.