After one of my friends completed university his father went out and bought a BMW M3 and a bare-bones Ford Focus to drive in the Winter ...

 i dont get thi spart of your post.  This is essentially showing they arent directly competeing if youre saying th emarkets and demographics are different, thats the point i think those who say they ARENT competing are making.  They are going after a different type of product, its not direct competition.

Market competition is different than comparing cross market sales.  If i spend my money on a laptop, i may not spend it on a tv, just because products have similarities doesnt mean they are in competition with one another...so if YOU would have bought a 360 or PS3 if the wii didnt exist is your personal decision....it isnt a decision dictated by the direct competition of consoles, its a decision dictated by your personal decision and taste, two different things.  Your personal decisions dont equate to market competition. 

Who cares about "direct" competition? That's just a word, there's no line where Direct Competition matters and then suddenly indirect competition doesn't matter. The consoles are competing for two things:

1) Gamer's money
2) Developer's interest

obviously winning (2) leads to winning (1). So long as developers will devote resources to Wii development over PS3/360 development, and so long as gamers will dedicate their money to Wii games and Wii accessories and Wi consoles over PS3 games/consoles/accessories, then they are in competition with each other.

No one ever asked about "direct" competition, which is a stupid term executives use to justify the fact that another product is outselling them 3:1. Sure, there are people who will not even think about purchasing a PS3, and some who will not think about purchasing a Wii, but they are the MINORITY. Most people will only own one console, and the three companies are competing for the interest of those people. Even those who own multiple consoles can only buy so many games for them, so they are still competing. And developers can only develop so many games, so they are competing.

The car analogy is flawed because a luxury $80,000 car is the same thing as a $10,000 car just with more comforts. Game consoles are a different beast altogether as the cheaper model can besuperior to the more expensive model due to the games released. If the Xbox was cheaper than the PS2, it wouldn't have sudenly outsold the PS2, because the PS2 had the userbase to attract developers and the games to attract customers. The price doesn't put them in different markets, it just restricts Sony's market.

This is just one of those discussions PS3 or 360 fans try to think up to justify why their system is being steam rolled by the Wii. You could argue the Wii isn't competeing with the Ps3 and 360 because of Graphics, but then you'd have to go back and say that for every generation there has been an outlier. Saying the Wii isn't competing with the Ps3 and 360 is no different than saying the Ps2 wasn't competing with the GC adn Xbox, it just a justification after the fact because the Wii isn't using the same PC-wannabe strategies the PS3 and 360 are. The Wii is fighting for the same franchizes and the same games so it is competing, rather directly might I add. It's also going to win. I'm sorry, like it or hate it, the Wii is going to win, companies will make graphically inferior games if they had to, they did all last generation for the runt of the litter, the PS2, now they're going to do it for the Wii. The PS3 is losing all its exclusives to the 360 via crossplatform support and even the 360's best games can't cling to the interest of gamers for more than a week after they come out. The Wii is slow in building its stamina but make no mistake, it virtually unstoppable.

Though I suppose you could say the Wii isn't competing with the 360 and PS3 because the 360 and Ps3 aren't game consoles, they're pseudo-PCs, the Wii is by definition the only thing I think anyone could consider a true "Video Game Console" this generation.

 Also, the luxury Car analogy only works for the car industry, you know why? Because that company's entire automotive business isn't riding solely on the success of that one model of luxury car. Also Sony has stated repeatedly that their ambitions for the PS3 aren't what one would equate to the limited and excluse success of a Luxury car that sells to the vast minority. Also, you buy a luxury car for the car, you don't buy a PS3 for the PS3, you buy it for the games (unless you're an icon fag who likes to show off their "bling"). Analogies only work based on relevancy, not loose non-contextual similarities in sales ratios.

I disagree with you obviously. Only because im not under the impression the majority of people choose a single console, especially the Wii at this point. The wii, i beleive, taps into a market that not only will buy a 360 or ps3 but a market that will also ONLY buy the wii because of its price and innovation. So, i believe what we are seeing is that the sales of people not intending to buy a 360 or ps3 is going strong and people ALSO buying a Wii to compliment their 360 or PS3 will continue to do so. This reasoning leads me to believe that we have people buying the Wii as well as a 360 or PS3, and then there are people who will buy a Wii that hav/had no intention on purchasing a PS3 or 360. I see no evidence at this time that the Wii is actually taking sales away from prospective 360/ps3 owners on a large scale outside of maybe a handful. Until we see 360/ps3 sales decline whilst Wii sales increase, we will never have solid evidence of the Wii detracting sales or competeing with the other two console.

The wii is selling so strongly because of its innovation and massive market appeal to all audiences, to compete in product terms i firmly believe a customer has to go in with the intention of buying product A or B, and at this point i see nothing that should lead me to believe people go to Best Buy with the question of do i buy a Wii, Ps3 or 360.

 please, just stop......"runt of the litter" give me a break.......and the ps3 is hardly losing "all" of its exclusives....not a very good first post, my friend.

Perhaps you'd like to offer some subtance to your claims rather than bluffing? PS2 was the runt of the litter in graphics, it was far behind the GC and Xbox, but its popularity and games (Just as the Wii's will) made it a success.

And I can't think of any other PS3 exclusives that matter really. Devil May Cry 4 is cross platform, Virtua Fighter 5 is cross platform, Assassin's Creed is cross platform. MGS4 has been confirmed for 360 by Konami. And there is talk of the two main FF13 games for the PS3 going to 360 too by Square/Enix of Japan. And While I'm sure Sony has a plethora of no name games comming out you fanboys will try and convince yourselves are the best thing since sliced bread, the rest of us and (I'm sure the numbers will agree) don't care.

.... not a very good retort, my friend.

 Understatement of the year IMO I think if the PS3 launched at $399 it would have obliterated the competition. I know people will call me (and Sony) crazy but I still believe Sony had the ability to sell their console on brand name alone. I just think they screwed themselves out of it by being $200 dollars too damn high. The cost was just out of reach man. All they needed to do was release something similar to Xbox is price and power and it was game over. Its not like the PS3 would have needed to gather 3rd party support, it had all of the support before it even launched! All they had to do was release something with a decent price for the consumers and they would have just continued where they left off.

I dont think its to late for them now, but I do feel in the eyes of the average consumer, every day that passes is another day a person has to let the purchase of a PS3 float farther and farther away from his/her mind. You have to remember the average gamer has no idea about BR diodes decreasing in price or anything like that.  The longer Sony waits to drop $200 and hit that magic price point the harder that uphill climb will be. 

As much as we'd like to blame their defeat on every other reason why people like myself have never cared for Sony's products, the fact of the matter is that its the price tag that is hurting sony. However, to lower that price they need to either take out Blu-Ray (which is unfeasable), remove reverse compatibility (which wouldn't lower it enough), or take an even bigger loss on each unit sold (which would only make the PS3 more of a trainwreck and threaten to seize the project all together should the stockholders take action). The fact Sony is already smugly boasting about the PS4 probably means they've not much hope for the PS3's long term success. Hell, they've already signed the Ps2 up for another seven years of service to pick up the slack where as Microsoft and Nintendo are retiring the GC and Xbox with Madden 08 this year. The only thing keeping the PS3 from failing even harder than the GC did intitially was the phenomenal momentum brought over from the power of the franchise established by the PS and PS2.