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My cousin has a modded Wii, but it's not able to play modded Wii retail games, only NES/SNES/Genesis and older games. But I don't really think that's the reason for lack of sales for certain hardcore games.

The reason most hardcore games don't sell on Wii is they are either niche concepts (see Zack and Wiki, No More Heroes, Madworld, etc), or they are simply not good and don't deserve to sell anyway.