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It makes perfect sense for Nintendo to compete for gamers in the same areas as MS and vice versa. I don't know why people always say MS shouldn't make casual games cause they sell better on Wii.

You'll never expand if that's your way of thinking. If Nintendo made an amazing FPS title and 5 million people purchased it they most likely expanded their Wii userbase to a more hardcore audience. It's not as much as Halo but does that make the game a failure? Hardly.