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I havent read the whole treat, but i think the mainly diference is the quality of games.

Nintendo knows very well the game they are playing and the market they have in focus.

Microsoft also knows its market, they even have enough money to support genres the competition is strong (JRPG).

SONY started playing the same MS game, it almost failed in it (i would say they are tied now), now they jumped to the Wii wagon and i think Nintendo is going to slap their face as they did with the PSP.