This whole not competition argument came about when "video game" snobs realized that their systems weren't selling well...so as apposed to their system losing, they opted the wii out of the competition, because A) it is underpowered and B) it attracts casuals and then they can feel better about themselves.
And they definitely do compete DIRECTLY. If I own a 360 and a Wii. I have X amount of money to spend for games/peripherals. How do I spend it? Both of them can't have all my money.
And don't tell me that Microsoft and Sony would not kill for the casual market. 360 have tried with some of their games...and Sony is trying it with Blu Ray.







