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You already answered your own question with "What if you needed the latest Wii to play the new Wii games? Or the latest PS3 revision to play a PS3 game or the newest X-Box 1080 running Live version 4.0. Would you actually like that?"  Who the fuck wants to upgrade that much?  That would leave some users stranded and not able to play the latest game that came out for the same system.  Why buy a home console system that is supposed to play whatever comes out for it but in actuality doesn't.  The reasons why home console system thrived more than PC gaming was because you didn't have to worry about upgrading to play the recent games.  You put the game in and it plays.  Same can't be said about PC.   PC gaming you don't have to update every year or two but of course it does help to play the latest most demanding game.   It is obvious why  consoles thrive more than PC gaming for reasons already listed.