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amak11 said:

3.)They aren't competing. How straight do I have to be with you? They are NOT competing. Nintendo, Sony and MS has accepted that fact. The last time Nintendo competed they got stomped, Gamecube, second strongest console of 6th generation. Xbox being the strongest. Both of these consoles got stomped by the weaker PS2. Nintendo chose a strategy in the 7th generation of fun and affordability and clearly being the overal sale winner in that generation says something. 

Sure Nintendo is competing with Sony and Microsoft, they are in the same market. All three try to sell home consoles and video games, don't they?

Sony, Microsoft and Nintendo are competing for their share of the console-market (hardware and software). Additionally, they are competing with other platforms for video games (PC, iOS, Android...). Additionally they compete with other entertainment venues (movies, TV, books, internet, music,...) 

There's a finite amount of time and money people want/can to spend for entertainment... video games are only a part of that budget.