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S.T.A.G.E. said:

There were less games and that is a given, but the Wii's consoles sales went stagnant due to a lack of casual titles moving into the final days. 2010 was a peak year for the Wii after they had the best E3 of their whole generation. The amazing sales came from the casual titles and Mario Kart Wii had still been selling bundles as well with the wheel well from 2009-2012. Th Kinect stole Nintendo's thunder in America in 4th quarter 2010 and had people wrapping around street corners to get it up until 2012. Casuals only focus on the latest trends. Nintendo and Microsoft capitalized on it and Sony failed to care for some odd reason, but I guess I should be thankful they focused on the core.

Wii still outsold 360 over holiday 2010 though; only after 2011's lack of games did sales collapse.