Of course the Wii is competing with the PS3 and the 360. The simple matter is that people only have a limited amount of time and money, and only a small amount of it can be spent on gaming. The simple matter is, if the Wii did not exist, I would probably buy a PS3/Xbox when they come down to a reasonable price and get some interesting games. People who buy multiple consoles are rare and for the rest of the world a choice has to be made. As well as this, they will be competing for developer support. Whenever you get people choosing between different options they are competing, and most of the world simply sees them as two different gaming machines (at least, the large portion of the world who don't spend thousands of dollars on games)
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