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d21lewis said:
Can Nintendo release a pricey, underwhelming, under-utilized peripheral that would limit potential buyers of a particular game, and still be graphically inferior to the HD consoles and PC? Sure.

This is what I was thinking as well. The motion control responses of Microsoft and Sony, however successful they end up being, are at least conscious efforts to outdo Nintendo's motion control. They are genuine competitive moves. Releasing a peripheral would not allow Wii to match the visuals of its competitors, so it wouldn't work at all as a competitive response. The graphics-concsious population will continue to gravitate towards PS360 while perhaps a very small number of potential consumers are affected by this. At best Nintendo will do it simply to make a small profit off the peripheral.