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This entire discussion of Bodhesatva about Epic is already a failure and a big strawman.
Talking about old consoles companies like Capcom is good, but then bring a PC game company like Epic, that only recently got into console just because of Direct X, is stupid at best.
Epic just is the worst example of a console company you could get, as it's not a console company, or at least it wasn't. It's still a PC game company, making engines. They saw an opportunity to sell their engines on HD console, and all those that invested in their engine realize how screwed they were.
That's why these companies couldn't scrap their HD project, they invested just too much money in this, even Squaresoft that tried to resist the longest. Now, they have to make these projects, unless all this money spent be put in the trashcan.

I also laugh at the stupid logic demonstrated : 3rd parties want to compete against Nintendo; they can't unless they put their A strings against them (which is not a revelation, as Miyamoto told them that 1 year ago); but they won't do that because of some stupid reason they have.
So it boils down to : "3rd parties can't compete against Nintendo because of some stupid reason they have". Well OK.
If forum posters can understand why 3rd parties supposedly struggles on Wii (they aren't struggling on Wii actually), 3rd parties can understand it too.
The truth is that 3rd parties are not struggling on Wii, they're struggling on the HD consoles, and I still think they will be destroyed if they go on like that. I won't cry over their death. If 3rd parties were struggling on Wii, they would do what they did on Gamecube : leave the console.
The problem is, there are two consoles making the industry boom this gen : Wii and DS. Remove those two, and the picture is alarming already.