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Shane said:
Neither Microsoft or Sony view Wii as a threat, and neither ever will. The way Microsoft and Sony talk about and react to each other shows fear. Nintendo is in its own market, as it has been for 10 years.

Whether they view it as a threat or not, the Wii is a threat to the PS3 and XBox 360.

Back in the day, Automobiles were expensive luxury machines that were only owned by the super rich. When Ford came along with their assembly line they produced a far inferior machine (in practically every way) but were able to sell it at a far lower price. The result of this was that Ford opened up (and exploited) a massive new market and (at the same time) pushed most of the existing companies out of business; most of the companies that remained became smaller and produced a niche product.