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Snozzle said:
The Wii was designed for a 5 year life cycle which means 2011 would be the earliest year Nintendo goes HD. But with the current popularity of the Wii SD this date may be pushed back a year or two. I don't think Nintendo will have to introduce the WII HD until the competitors start to equal or surpass their sales in a significant manner. The PS3 is down 29 million units it will take a few years of Uber stellar sales EVERY MONTH just to close that gap and the 360 isn't much closer. I think Wii sales will start to slow over the next two years because its Lo-Def design will start reaching saturation but sales would have to stop today in order for the competition to surpass it during its design lifecycle so I don't see a need until 2011.

The HD twins have started to outsell the Wii on a monthly basis pretty consistently now this year. This was not happening last year. 

In Japan, the PS3 has started to outsell/sell on par with the Wii. 

Natal and Sonywand are coming next year. Both HD consoles are now hitting mass market pricing (sub $300). 

I think Nintendo probably would be wise to cover their bases. It would be a mistake to wait until your sales cool off substantially before releasing a new console. Take your audience for granted and they will go elsewhere ... cardinal rule of the game market. 

Besides there's no rule that says they can't continue with the current Wii being positioned as a cheap, entry level type system well into 2011 and 2012. Hell, Sony still sells the PS2 and probably will still be selling the thing in 2010 and 2011.