One thing I forgot to mention is the clearly different views some (a majority?) of third party developers have of the three consoles based on their manufacutrers, which also has a big impact on their decisions:

Nintendo

There is clearly a level of fear here that Nintendo 'understands' the Wii in terms of motion controls and titles as well has having the dominant franchises for the system - Mario, Zelda, etc.  This, coupled with what has been percieved as weaker sales of certain titles has got a lot of third party developers suspicous of the platform and seems to be giving rise to a perception that your title will sell less and that you're doomed to fail competing with Nintendo themselves.

Clearly, the strong success of the core franchises plus Nintendo's success with titles like Wii Fit and Wii Sports, etc. does nothing to dispel this fear.

Also, while the Wii does sell a lot of third party SW there is no doubt that enough titles seem to perform weaker than expected, particularly in certain genres, to re-enforce this.  In the end Wii owners need to buy enough copies of certain titles to ensure they are seen as popular on the system, and this hasn't happened in certain cases.  Rightly or wrongly I feel some developers ignore or forget the sales/cost ratio and compare sales on Nintendo to sales of similar titles on 360/PS3 without taking into account the lower development costs - i.e. you could make the same return and profit on Wii selling less as your outlay is less.

I suspect many third party developers do wish Nintendo weren't as dominant with SW on their own platform as is the case.

This of course is affected by region, too.  With I think western developers much more cautious of the platform than local ones, although even there I feel a lot of local support is actually focused more on handhelds (Nintendo's own DS range plus the PSP).

MS

In many ways, it's easy to see the lure of the 360 for many third party developers.  MS has by far the weakest first party capability itself, and Halo aside needs third party titles in a huge way on its system.  MS clearly puts a lot of effort into wooing developers as a result of this, which only re-enforces this position.  The 360 sells a lot of SW particularly in the West and particularly in the English speaking territories - something that makes it very attractive to a lot of Western third party developers.  It also has a good SDK and, for Western developers turning from PC to consoles makes for a very easy transition target.  To put it simply, if you want to make a title, particularly a Western orientated FPS or action title, the 360/PC makes a very appealing combination.

The main downside of the 360 is cost of development and competition in the core genres.  Producing a good HD game takes money and if you're going to produce one in the popular genres on 360, particularly FPS/TPS with online MP, then it better be good and original or it could fail vs the plentiful competition.

The other downside I feel is that some developers are uncertain about the popularity of broader genres on 360 vs the core action/online titles.

360 is also attractive for Live, which can provide a channel for lower cost games to reach a more niche audience.

Finally, the 360 has been (perhaps still is) attractive to Japanese developers wanting a slice of the currently popular West.  Although clearly results for more Japanese centric titles on the platform may give pause to that being exclusive in nature.

Sony

Sony presently lies between Nintendo and MS I think for a lot of third party developers.

Sony has a strong first party development capability, and does own some key franchises in the same manner as Nintendo.  But historically it's a platform that's been host to massive third party success, and there is no doubt that many third parties are comfortable in principle with supporting the PS3 as a platform, particularly since the platform 'found its feet' and started selling most third party titles in comparable ratio to the 360 (WW that is, clearly it varies by region).

Where it differs from the 360 is that it has (still?) historically been tougher to develop for, and it's harder to produce a good 360/PS3 or 360/PS3/PC title than a good 360/PC title.  For developers moving from PC to console support this has been a particular hurdle, and it's no surprise to me that initially the 360 got all the love and even now still has sole console focus from developers like Valve.

However, I think for most developers that particular hump is fading, and like the 360 the PS3 is seen as a fairly safe bet for solid sales if you produce a good title.  It's weakness for developers is that in US/UK core titles sell less than 360 although this has evened out in ratio.  On the other hand there is a perception, I believe, that a broader spectrum of genres can sell well on the PS3, making it seem more appealing I believe to developers looking at titles outside the core 360 genres or to spread the risk of such titles across both platforms.

PS3 also has PSN, which is an attractive channel for the right titles.

Finally, it appeals to Western developers as a safe bet to extend sales on top of 360 while it clearly offers a better chance of penetration in Japan than 360 (although this is a lesser priority I think for a lot of Western developers).  Clearly it is now a fairly safe bet for Japanese developers as titles now sell well enough locally plus the PS3 offers access to the Western market now in a similar manner to 360.

In the end, I believe currently the PS3/360 platform just seems more appealing to a lot of third party developers from a potential sales/competition perspective, with the main downside being cost of development.

The Wii is attractive for potential sales and cost of development, but right or wrong a lot of developers see it as being far riskier from a competition (with Nintendo) and breadth of genre perspective and unless that changes it does seem likely the Wii will never see the dominance in third party support the PS2 did before it.

I just wanted to add:

Wii

Is probably the hardest console to develop for adequately given the massive churn rate of developers in the industry. Most developers, especially the smaller ones which haven't made a name for themselves would not have many staff which are familiar with the style of graphics hardware. Its quite likely they haven't touched non programmable shaders and they aren't good enough to design a game within the constraints of a more limited system.

Xbox 360

I just wanted to add that I've heard talk from several developers at Beyond3D that the difference between Xbox Live and PSN for downloadable games are quite significant in terms of sales. This explains why the Xbox 360 recieves a lot more exclusive content.

PS3

For some reason the console seems to have games which are buggier than the Xbox 360 counterparts, im not sure why though.

HD consoles

The cost of development is higher, but the bigger issue is that the competition is absolutely brutal. A lot of good developers can struggle to make games with market appeal and in the end have to eat their own shirt. It seems if you're not getting about about 82/83% metacritic you may as well go home and ideally to be profitable a project likely has to be in the 85-89 range minimum to secure future titles in a series. A lot of developers don't understand how to market their games and create excitement about their products and in a year with a lot of content its very easy to get lost in the shuffle if your name isn't Epic, Valve, Bethesda etc.

My take is:

Wii - the churn is an issue, as are the controls if you're used to thinking about gamepads and the like vs Wii.  For many third party developers it clearly remains a somewhat awkward device for them.  The fact that what appear to be perfectly good games fail to generate strong sales with such a large install base is also clearly a concern.  The PS2 install base seemed to near enough guarantee a broad enough mix of tastes for any decent game to do well.  The Wii doesn't seem to be delivering quite that experience, which makes the developers twitchy.

360 - I think PSN can sell games very well but the model is different.  PSN is about a relatively small number of titles that offer something quirky or unique, like Flower -  those titles sell well, however PSN doesn't seen to support a broad range of general titles and arcade style titles - not sure why perhaps ownership demographics.  I'd say on PSN you better be sure the game is distinctive and quirky and is going to generate serious interest.  Most PSN titles that succed are fairly big games in their own right and often get plenty of coverage by gaming sites vs Live which seems to have lots of stuff but more smaller titles that don't get the same exposure.  Shadow Complex was the first Live title that for me seemed equivilent to what I think of as a PSN title.  So I think the issue with PSN is more around what actually works on the service vs Live.

PS3 - due to the different architecture it gets buggier code because, ironically, the console is less forgiving on code quality.  The way the 360 works, without getting too technical, allows for code that is a little less well written to work well, as it leverages a strong SKDK and a lot of middleware plus its basic design makes it easier for developers.  The PS3 requires better written and structured code as it's not designed to be as forgiving for developers.  I believe this is why you get quotes that diverge on the consoles.  Some developers believe better, stricter code means a better environment, and talk up the PS3, others prefer better middleware support and adstraction layers and therefore prefer 360 and complain about PS3.  This is why all multiplatform games really should either lead on PS3 or be developed in tandem.  Taking code developed for the 360 to the PS3 is likely to expose more issues with the code's stability - i.e. show up more bugs - whereas taking the solid code the PS3 requires to the already more forgiving 360 platform pretty much guarantees good results.  Also the PS3 requires developers to be much more specific in how the handle memory and thread allocations, whereas the 360 simplifies that process.  Anyway, the end result is that a fair number of games clearly still take 360 code to the PS3 which exposes more bugs or exposes weaknesses in the developers own ability at the lowest level.

HD consoles - totally agree.  This is the big issue developing for them.  The rewards can be great, but the competition is fierce, particularly around FPS/TPS and the core genres.  I think there seems to be a certain nievity from some developers that putting a decent FPS on the HD consoles will result in 2M plus units right away, which isn't the case.  The key, as EA noted, is marketing.  It seems on the HD consoles that you need to factor in a certain level of marketing to get the notice needed to reach the broader install base.