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Does Nintendo really compete with Sony and Microsoft? The Wii U is so underpowered it would not be able to get any new generarion multiplat even if the console actually were successful. People who buy the console do it for Nintendo games.
The problem is how expensive it is, if Nintendo is going to make an underpowered console that will only play Nintendo games and exclusives designed for that console, like Bayonetta 2 or Wonderful 101, then they have to make it much cheaper than the other 2 consoles, because most Wii U owners will end up buying another console for the non nintendo games.

Microsoft and Sony do compare directly. 2 gens ago Sony sold over 150 million units. last gen both sold 80 million. That seems to me like the PS2 userbase just got split in half.  Most of the big sellers are multiplats you can get in both consoles.
My big question is how could Microsoft not know Sony's console would be both more powerful and cheaper than theirs? Some kind of industrial espionage must exist.