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OK I am going to say this here. I am sick of hearing about how Nintendo is killing HD gaming. This is glaringly wrong and baseless for at least two reasons.

1. There are HD consoles out there right now and they are selling better than last gen. If Nintendo had made an HD system we would have had less consoles sold this gen annd how many people are saying the PS2 is killing HD gaming even though it is still selling well? Not many from what I can see. Nintendo may be stymieing HD gaming at worst it is delaying it which brings me to my next point.

2. Nintendo will make a HD gaming console next gen so they can not be killing it. They will be making one when it is more affordable. There wasn't much of a point when the Wii was introduced most TVs were SD and many still are in 5 years the story will be different and the demand higher for HD gaming for a few reasons.
a. Most channels are still in SD many people can't even tell the difference right now. However as exposure to HD increases many people will notice it and will want higher def. This will not happen over night but it will eventually happen. Right now it is just bigger and flatter.
b. The increased exposure comes not only from the introduction of HD sets but in fact as the number of sets that are released increases the amount of HD programming will. As this happens more more people will be watching HD and become accustomed to it as the norm instead of fancy or special. When this happens the demand for HD in all things will increase. Also a factor is the ability to broadcast less lossy HD through cable and satellite systems so that 720P will look as good as they can.

On topic: I do believe Nintendo is headed in the right direction at the right time. HD gaming is niche and expensive comparatively at the moment. By focusing on changing consoles inputs at this time they aren't hurt as sales show. Next Gen you will see a larger graphical jump because of cost and reduced die sizes at a time when mainstream users want HD. Since these are consoles for TVs the most it will be is 1080P . Both Sony and MS already put out 1080P but in still very strained or unique games. However in 2012 game systems should do this cheaply. So Nintendo took a risk and went to change gaming inputs as a result it hasn't hurt anybody all that much and next gen we will see somethign a little different than just Haze now at 1080 instead of 576P.