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ioi said:

Simple, the markets in which PlayStation is strongest have a later generation cycle than what we'd traditionally think of as the core markets. In the USA, Canada, UK, Australia, France, Germany last gen has been on the decline for a long time and in most of those markets (France and Germany being the exceptions) Xbox is a stronger brand so has seen more of a decline. Most of the current PS3 sales are coming from Latin America, Spain, Italy, Eastern Europe, Middle East and Asia - regions that peak 2-3 years later than everywhere else. This is why PS2 was still selling decents amounts every year until recently despite being dead in the "main" markets.

This is actually another point entirely and if Nintendo / MS can get a decent presence in these markets where Sony has always enjoyed a strong foothold then they have a real chance to make ground this gen.

Do you think Nintendo could ever possibly be able to branch out? As has been said, Nintendo is a smaller company when compared to Microsoft or even Sony, in physical terms. (As in, their global impact.) Do you think Nintendo might not have enough power to be able to carry out a more widespread blanket of markets?