Part of the problem here is the difference between having an essential all in one item and having a frivolous all in one item.

When people pack ten thousand things into a cellphone, it's honestly useful. how many people just walk around carrying a camera in their pocket everywhere they go? unless they're planning to take a picture of something, it's very unlikely for them to do so. But almost anyone who has a cellphone will carry it with them. It's the entire purpose of having one. So if you add a camera to that, and an MP3 player, then you can listen to music, still receive a call, and if you suddenly see something that you want to take a picture of, the camera is right with you.

With the increasing necessity of instant communication, people have cellphones because they're essential, but we can hardly label MP3 players, cameras, video players, and other similar features that are added to cellphones that way. So when these features are added into a convenient package, it adds to the value.

The same isn't true for a home console. Video game consoles are not considered essential, and never will be. Video game consoles are designed to Fill A Niche.

If you have a hole in your tire, you need a patch to be put on it. When someone offers the choice between a patch for your tire, and HALF A TIRE, you don't choose the half a tire simply because you're getting more. What you need is a patch, and anything more than that becomes inconvenient.

Now perhaps, in some cases, the patch that Nintendo offers, just isn't big enough for the hole that is in the tire. In these cases, Sony and microsoft are offering entire half tires, which can probably be cut apart for the piece that is the proper size. But it is also possible that people will choose instead to simply get the patch nintendo offers and then look for something else that only fills in the rest of the hole.

It is said in business that there are four things that make a business successful.
1) Being seen as having the best quality - even if PS2 was the most successful console up to this point, Nintendo was still well known for it's high quality games. Even if 3rd party developers are slow to pick up their pace, nintendo is still known for its quality.

2) Being different from other companies - Playstation 3 and Xbox 360 are both considered to have very similar specifications and designs, and merely stronger versions of the PS2, which most people already have. Wii is seen as an entirely different console from everything that has come before it.

3) Being specialized in a specific field - Playstation 3 and Xbox 360 are all apparently pushing towards an All in One console, but by doing this can never provide the best experience in any one field. Nintendo focuses on games, distractions, and other various forms of simple, fun, interactive entertainment.

4) Being cheaper than the other companies - Nintendo is the cheapest, and hasn't had to drop their price yet in order to do this.

Most businesses settle for 1 or two of these branches in order to be successful. Nintendo has essentially managed to address every single point by which a business becomes successful.

I say the Wii focused on what people loved about games, the fun factor, and M$ and Sony focused on tech first and that games come later. Nintendo looks at the field more as a developer and not as a console manufacturer. Nintendo also believe that sooner or later the high performance price will come down and then you integrate. That to have the best console this year is stupid because there is better technoloy in 6 months rather you wait for another couple of years when the high performance isnt as expensive then integrate it, with a profit that a consumer can stomach.

nintendo specifically stated that the wii Could have had 720p graphics(heck their system CAN do 720p, they choose to not do that due to the frame rate hit it would take).. but since the price would have been Higher than what they wanted to sell for, they Chose not to go that route,

in terms of numbers sold the GC was a failure...

in terms of profitability..the GC was a smashing success- it made nintendo money.

in terms of numbers sold the 360 is a succcess, the ps3 is a success
in terms of money made for each company- both are current failures- though the 360 MIGHT make it to profitability this year-sony won't.

in terms of numbers sold the wii is a smashing success
in terms of money made for nintendo the wii is a smashing success
they make something like 50 bucks PER unit sold, sony Loses like 1-200 per unit sold...360 i THINK makes money now (maybe 20 per unit sold)


if the wii had gone traditional- Gamecube like controller, hd graphics, ~350 price...they'd be getting trounced in sales.

they chose to take a different path- and it's been worth it