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Soundwave said:

iPhone/iPad IMO has already stolen most of this market.

Here's the tough pill that Nintendo and even MS are probably going to have to swallow -- "casual gamers" don't value video games the same way core gamers do.

They want games that are $1-$20.

Video games are a distraction for them, not something they want to spend $50-$60 a pop on.

Games are ideally what you do with the equipment you have, when you have a spare moment.  It isn't something you do with equipment you go out and buy for the sake of buying.  And the price point is what the market can bear pretty much, due to how competitive it is.