Sony is not afraid of Nintendo. Sony came into the gaming industry to compete with them because they screwed them over in a business deal with what is now known as the Playstation. Since they dominated them two generations straight, I think Sony has let go of quite a bit of that foul steam they once had. Sony wants to find that group of people who don't game like Nintendo did and come up with the next big thing to milk them just like Nintendo did, because they don't stick around. That markets profits made Nintendo a greater company in since and power because of all of that profit. Never before had Nintendo sold over 90 mil until the Wii.
The gamers Nintendo had were not even casual gamers. Even casual gamers buy consoles and play certain games. Third party sales translate to the fact that these people did not have even the taste of a casual. They mostly bought what came bundled with the console and bought some games for their kids. Third party sales were just horrible on a console that sold over 100 M units. Nintendo had more well rounded sales for third parties on the GC and N64 than the Wii.
If Sony got got the Wii crowd of non-gamers to come back they would set records for console sales that the industry had never seen. Sony set records twice, but even this would be too much domination for anyone who believes in competition to swallow.
