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I agree with Sqrl.

I think Nintendo benefits more from the DS dominating the handheld market in the console war than Sony does by even having a PSP. Mainly because the DS is so casual and nearly every person in the house has one.

This leads to the problem of people isolating themselves to paly their own game, which is solved by the parents (if they're any kind of parent that is) trying to get the family to interact more with each other and less with their onwn video game persuits.

Since the whole family is playing game on the TV why not get a console? Which one should I get? How bout the one the people who make the DS we love so much makes? Yeah that sounds good, lets by a Wii. Besides I hear they're really fun and stuff. Where can I get one?

It all works out for Nintendo in the end. Besides I think your argument is a little flawed in that you seem to forget that the Wii is nearly sold out Worldwide and will most certainly be during the holidays.
If the DS was stealing sales from the DS then the Wii wouldn't be getting scalped on E-bay.