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Look at the Gamecube, 199$ at launch, cheaper than the other consoles and was competitive in terms of hardware power with the competition (more powerful than PS2, and just slightly less powerful than Xbox) I'm pretty sure that Nintendo with their expertise could have created hardware with at least programmable shaders and near the power of 360 at a reasonable price, along with the Wii Remote and motion control. They could have done it, but they were a bit foolish not to in one way. On the other hand, they made profit from the start, so they have a ton of money in their bank right now.