Malstrom is wrong because he can not see the obvious point that is right in front of his (and all of our) faces ... Early adopters buy into systems based on their potential, late adopters buy into a system based on how well that potential was realized.
The Wii was so popular early on because of the potentially limitless interactions that were suddenly available was easily worth the "cost of admission"; even if the Wii didn't have the latest and greatest graphical technology. The people who bought the Wii early on were very impressed and showed it off to as many people as they could, and (effectively) 'evangelized' new customers to the Wii. For a couple of years people bought into the Wii and waited for the torrent of games to take advantage of the potential and many were certain it was comming because third party publishers would "obviously" support the fastest selling console of all time ... and it never came.
The Wii is struggling because no one has any "faith" that any quality third party games are comming; and the biggest Nintendo fans already bought into the system so a new Mario or Zelda game is not going to really recover any confidence.
Now, in my opinion the logical conclusion to this problem is that Nintendo needs to release a system with significant potential to attract early adopters again while doing everything necessary to get decent third party support to ensure that their system's potential is actually realised later in the generation.
