I think all three companies are doing more or less what they need to do.
Nintendo has little choice. They simply cannot enter the horsepower race the other two are having. They are a modestly-sized company, not a huge corporate company. They could not afford the luxury of losing untold billions of dollars in order to gain a sizeable market share and be profitable perhaps three or four years down the line. They would have sunk faster than the albatross in ''Rime of the Ancient Mariner''...
Imagine how absurd it would have been if a small country like Monaco had entered the arms-race held between the US and the Soviet Union during the Cold War era. They would have never been able to keep up.
So Ninty resorted to a paradigm-shift. Instead of playing the same game as MS and Sony, they opted on exploring overlapping markets by focusing some on the hardcore audience and a whole lot more on the casual one, which I wouldn't dare say was non-existent, but at least it was much smaller than what it ios today. It paid off in a big way.
Maybe if Sega had taken a similar path they would still be creating new hardware. Damn, I loved my Dreamcast...
I agree with disolitude's sentiment that I would rather pay a little more to get the most powerful (but affordable) technology under the hood. But the point of the article is to point out that in view of Nintendo's huge success with much less costly technology, the other two might reconsider their strategies. They certainly do not feel they owe us any favors by constantly losing money to keep us customers satisfied.
A solution like releasing a state-of-the-art machine and a low-end, affordable product has worked for companies in other industries, such as car manufactures and computer manufacturers. But I don't think they would want to confuse consumers and cannibalize their own sales by taking such an approach.
My prediction? Perhaps we will see a slight turn of events, as Nintendo makes a bigger relative leap in hardware specs next generation, while remaining the most affordable machine, while the other two attempt to make their next machines a little more affordable. At least Blu Ray technology and HD media will be a lot more commonplace then, so that possibility may not be so far-fetched.
Make sure the shadow you chase is not the one you cast.
