As shallow as it sound, I think it boils down to graphics. I read somewhere from Hideo Kojima that the Japanese style of creating graphics for games is to put drawn paper onto the screen, while Western developers start from a graphics engine and build from there.
Could it be that Nintendo does not want to spend the money for a licenses to Crysis-like or Unreal 3 graphics engines, therefore they cannot attract non-Japanese 3rd party support to the extent of the 360 and PS3?
I have yet to see a Wii game rivaling Bad Company 2, Modern Warfare 2, or Red Dead Redemption in realistic graphics, while I have seen the best cartoony graphics possible in games put out almost exclusively for the Wii (minus Borderlands and Crackdown).







