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I think this is false, but unlike others, I don't find the trade in program to sound that bogus. If you think of the new market, the house moms and grandparents that bought Wiis, they most likely would not be up to buying a new console when their old one still works. Any kind of Wii 2 would not sell as magically as the Wii for this reason. However, if they issued a trade in program, that might give these people incentive to buy the new console.
These people are not like you and I. They won't go out and blindly buy a new console even though our old one still functions. Much like most people wouldn't go out and buy a LED 240hz TV when they already bought a standard LCD 60hz TV two years ago.