I think it's about games. If your machine only played games but it had the games people want (pick any of Call of Duty, Halo, Mario, handheld Pokemon, etc) people would be rushing to buy it.
Any console company that does the above will succeed regardless. I have no doubt MS and Sony will get into a tech war, and Nintendo will try and imitate them badly, but it isn't inevitable if one company realises why people actually buy consoles.
Having an OS and media capabilities etc means two huge bad things for a company. i) Extremely high ongoing maintenance costs, and constant need to be making business deals with content distributors like Netflix or Onlive or Universal, ii) as soon as you fall behind in one tiny feature you lose the tech battle and your sales will crater. See Nokia, RIM, LG etc,. Combine this with an incredible dependence on marketing and image.
I don't understand why a company would want to enter the crowded tech/content market, when all they have to do is what they've been good at since 1986 and make games people want to buy.
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