The Wii does have an effect, but its success doesn't stomp out the HD market. How many games cross over from the PS3/360 to the Wii and the other way around? There is some, but the market for an HD console (or a graphically more powerful console) is definitely there because some games don't cross over well. For example, the Wii offers very little in the way of online gaming. It is there, but only for some games and overall, the Wii is meant much more for local play than online multiplayer. With virtually no online infrastructure, it doesn't cover all the bases and it can't challenge that part of the market. With no hard drive, it can't offer that much new content for games. So, would you really want to have Rock Band on the Wii when you would quickly fill the 512Mb of internal storage with downloaded songs.

I'm sorry to break this to the Nintendo fan club here but the Wii is not the be all end all of gaming. It does affect the market, but there is a large segment that it doesn't serve so there is a large space for a 2nd major console.

I do agree that the Wii will affect the prices of the next generation of consoles. Microsoft and Sony will probably try to get closer to $300-$350. Of course this will also mean that the power improvement over the previous round will not be as great as it was from last generation to this one.

actually Activision said nothing against Ea's Europe sales for the PS3 and 360 so im going to guess they agree.