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It worked awesome for the Xbox 360. It was a damn good plan to scrap the original Xbox and get a jump on the competition.

It could have worked for the Wii U. The responsibility for that failure goes on Nintendo. They released the Wii U but forgot to release any games that could have built up an installed base while there was no competition. Imagine if they'd had a Mario Kart ready to go in the first year.

No, it definitely can work, it just doesn't work automatically without any efforts from the manufacturer.