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Then I'd have to say thier real competitors are over at PSN, not XBLA. Sony has been the company championing independent and small games on the PSN without the restrictions of XBLA. There's no doubt that there's a sea of crap that the good titles can get lost in on XBLA though. For every Alien Hominid or Rez HD there's a sea of crappy 80's arcade games.

Of course, do any of those statements jive with the exitence of Nintendo's Virtual Console? The VC is nothing but retro and it does huge numbers. WiiWare's actual competition is on its' own platform in the form of the VC, in my mind.