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Not sure if I'd use a term like death knell. The Wii has without a doubt shown that using proven technology in a new and interesting manner is more profitable and enjoyable to more customers than packing a box full of cutting edge technology, but I think the market niche for that kind of stuff is big enough to support at least one console.

Things might be different in a year or two, depending on how completely the Wii hogs up all third party support, but for now the HD consoles are making money.