Yes, the Wii is competing with the 360 and PS3, and it's easy to prove it

[dib8rman]

@NJ5 nice find, I didn't realize so few people owned multiple consoles.

I'm not sure if I commented already but err someone already hit the nail on the head when they said a Wii sold
is a PS360 not sold in 93% of the cases.

Ahh but the marketing is where it's being askewed a bit, take a step back and look at the 3 relations.

Business model + marketing = competition, as long as your trying to sell something your competing with someone else in this day and age. So if the Wii isn't competing with PS360 then who is it competing with? Refrigerators? Well it sure isn't Barbie dolls as both are marketed heavily towards females.

Let's take another look at what Nintendo is claiming, I'm sure we have all heard "we are not directly competing..." - Iwata (I slaped his name on it as he's said that dozens of times, so I feel pretty safe doing that.) A business model is a set of guide lines that a venture is based around, it affects everything from the products to the marketing strategy to even the logo of a business, as such a business model set's in stone the nature of that business by aligning it's methods and executions with it's expectations in the most favorable fashion.

The idea is that a succesful business model becomes traditional once it's accepted by competitors - hence the term traditional being transposed on to gaming as the directional assests of the products (software and hardware) are copies of the business model. (See EA) The idea of franchises are just successful products under a business model.

The Wii is different as it's widely accepted that Nintendo is exercising a disruptive business model, which if they become successful it will probably become the new traditional model. (People like making money, I know it's wierd.) Does that mean Nintendo is competing... yes and no, they aim to upheave the old business model but as far as users go they are aiming for what traditional business models claimed and what their new model claims.

"It's just good business."

Buuut, as far as install bases go, Nintendo has appealed already to who they need to, they just need to keep the reminder there. Now they will probably be pushing even harder into the install bases of the PS360, they probably aren't doing this, for lack of a better term; actively. It was more part of their business model and just the natural progression of their product.

So I guess the final answer is to the question: Is Nintendo competing directly? Eventually.