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They didn't want to.

Really though. Sony took a big financial hit to right the PS3 ship. I'm not sure they made that money back during the PS3 era, although you could argue it help set them up for success with the PS4.

Nintendo is a fiscally conservative company, and they're pretty smart. They were able to make money during the Gamecube era, and they're back to profit now. If it's a choice between growing install base and making profit, they'll generally take the profit.