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artur-fernand said:

...but didn't they make a lot of money with the Wii and DS? They sold like hot cakes (a combined 250+ million, I mean, holy shit), were profitable from the start, and Wii games weren't nearly as expensive as HD games. So... what's with this argument? Shouldn't they have a lot of money now, to try and estabilish a strong installed base for a more traditional, powerful console? Not as much money as MS, but probably more than Sony right? Especially before the PS4 released?

What did they do with that money? Or am I full of bullshit here?

It's not the amount of money, it's the level of risk. They can't risk getting into an arms race with the other two. If Sony's gaming division collapses, they have 20 other products to keep them afloat. If MS's gaming division collapses, they have 100 other products to keep them afloat. If Nintendo's gaming division collapses, Nintendo collapses.