Developers are probably mainly switching to Wiiware because at launch they can go on there with a lot less competition than is currently on XBLA, and for a much cheaper development cost besides.
And they probably don't feel like they're competing with the VC because Nintendo (smartly?) didn't upgrade the VC titles, unlike the XBLA remakes which do offer direct competition.
And since MS is now pushing the hard-drive-less 360 Arcade as the XBLA-preferred option, how can you say storage space is not an issue with that as well?







