GotchayeX--
When Nintendo said they "weren't competing" with Sony and Microsoft, it wasn't just PR trying to lower expectations. It literally is part of their strategy to purposefully not compete with Sony and MS. And in fact, I think that they were trying to send a message to anyone listening that Sony and MS would be unable to compete with them.
I mean, they publicly named their system Revolution. They talked very openly about Blue Oceans and Disruption. The last cautious PR move they made was calling DS a "third pillar." Since then they've basically been advertising how they're going to revolutionize the market.
"[Our former customers] are unable to find software which they WANT to play."
"The way to solve this problem lies in how to communicate what kind of games [they CAN play]."
Satoru Iwata, Nintendo President. Only slightly paraphrased.
