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I'll largely second what others are saying, plus a little more.

1. The PS3 and 360 are largely just more expensive, flashier versions of the PS2 and 360. This is not to slight their libraries, but most of their games offered relatively little new to the last gen gaming experience. That offers little incentive for typical gamers to drop $400-600 on a new console (and don't bother mentioning the "Core" 360 - anyone with rudimentary math skills could see that was a horrible deal). However, the WiiMote/WiiSports really does add a novel element to gameplay. Factor in the low price, and there's a lot of players who would be willing to give it a spin while waiting for the 360 and PS3 to cut price.

2. With good PS2 games still being released in 2006, and a huge catalog to draw from, there was little reason for gamers without bleeding edge home theater systems to jump to the next gen. When you consider that there were roughly 160 million "last gen" consoles sold, and about 45 this gen (with many new gamers in the mix), there are clearly still a lotof PS2 owners sitting on the sidelines.

3. 2008 games don't sell 2007 consoles.

4. Personal opinions aside, there were relatively few "must have" games for any of the three systems until this fall. MS had Gears of War and Oblivion, Sony had Resistance, and Wii had WiiSPorts and Zelda. Most gamers aren't going to drop 4-6 Bejamens to play the latest edition of a cosoles sports game/racer/WW2 shooter. As the libraries build up, expect to see more and more gamers willing to jump in.

5. The 360 and PS3 are in direct competition. They are targeting the same demographics, the same socioeconomic level, with similar (and often the same) games. Thus the sales of one tend to cannibalize the customers for the other. OTOH. Nintendo is chasing a very different market (or appealing t the same market in a different way), which reduces it's competition, and increases overall sales.

6. As a reult of #5, since there is so much overlap in the titles of the PS3 and 360, the Wii is widely seen as a perfect "second" console for PS3/360 gamers. This further increases it's customer base. For those gamers who pick the "Wii" as their primary console, there is a pretty even split between the 360 and PS3 as #2 (if they even get a second - most probably won't).

7. The main selling point of the 360 and PS3 are hi-tech features about which the public (American, anyway) are very uneducated and, to be honest, uninterested. DVD was a good trojan horse for XBOx and PS2, as it was a simple concept to grasp, and followed a precedent (cassettes/LPs being replaced by CDs). Most people don't see an advantage to HD/BluRay over DVD, most HDTV owners don't have HD channels, etc. THe main selling point of the Wii - motion control - is simple for the average consumer to understand, and easily conveyed in commercials.