why companies arent considering nintendo direct competition?

[Bodhesatva]

First, there are some valid reasons to say that DS/PSP are in different markets. Really there is no such thing as two products in the exact same market: that would imply that 100% of the people who might be interested in product A are interested in product B. For example, what about the people buying the PS3 as a Blu Ray player exclusively? They aren't and never would be in the market for a 360, for example. Therefore the 360 and PS3 markets aren't exactly the same.

The Wii and PS3/360 markets overlap significantly, but also have a significant region of exclusivity (with the Wii having the lion's share on that front, for sure). If someone said: "The Wii and PS3 have significant overlap, but we think there is also a lot of distinct features in the PS3 that appeal to a high end tech market, which the Wii does not attract," that would be about as realistic a statement as I can come up with.

But of course, the real reason Sony/MS say such things isn't because there is a small amount of truth to it (which obviousy favors the Wii more than it does the 360/PS3, financially speaking), or even that they're sore losers -- it's because the job of a PR person is to pain their product in a positive light.

What you call "whiners" or "sore losers" I call "PR people doing their jobs."