Well million, by your logic then the PS2 wasn't competing with the Xbox because the Xbox targeted FPS fans, PC gamers and core gamers whereas PS2 had everyone.
There's some logic to that, but the problem is this:
Your saying Sony has intentionally left that entire PS2 base to go after 360's much smaller base. Oh wait? Your not? But that's the base the Wii is stealing (plus getting some new gamers). If Sony didn't intentionally leave 'everyone' for core, then they are most definately competing (poorly) for that marketshare against the Wii.
MS has also numerous times said they want to compete for that market as well, and brought out Scene It to do it.
You are right that PS360 are successfully getting one type of consumer and Wii is getting both those and other types of consumers, but do not think for a second that PS360 don't want Nintendo's market and aren't competing for it, they are, and in fact both need to expand past just core gamers in order to achieve meaningful profitability. And of course Nintendo wants core gamers too, but they are succeeding in winning that market too (although often as a secondary console).
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