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Just make decent hardware that one can sell at a profit. Trying to outgun Sony or Microsoft who don't mind taking a loss on each system sold is a losing game. They have to be profitable or near profit on each system sold at launch.  The launch price also has to be no more than 250-300 max.  So this limits Nintendo on having an "inferior" machine compared to the companies that are willing to take a hit on hardware.  One must make up for that with compelling software.