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Reggie: "The conversation goes like this: 'We have a 22-million unit installed base. We have a very diverse audience We have active gamers that hunger for this type of content. And why isn't it available?'"

Why is Reggie even asking this question, when he apparently knows the answer?

 

3rd party publishers don't want to pay the excessive expense of creating high-quality (which cost more) exclusives for a system which is wholly unlike its competition, and worse, make games for a hard-to-target demographic.  How many shooter fans does the Wii have?  How many assassin/platformer fans?  The numbers seem to suggest that, while the Wii, in general, has plenty of fans, they are, in fact, (to quote Reggie) "a very diverse audience".  In other words, they don't all like the same games, effectively limiting the number of buyers.