Exclusives makes the consoles unique in their own way more than just hardware.
Competition drives down the price.
The Wii basically has no competition and hence no price cut anytime soon. PS3 and XBox360 on the other hand...

If there were no exclusives, there would be immense pressure to develop every game for the lowest common denominator. This leads to games that don't take full advantage of PS3's bluray, 360's online functionality, or Wii's controls. The pressure would be to make a game that fit on a single DVD, with stripped-down online that was compatible with any console, and was playable with conventional controls. To do otherwise is to incur costs that might not justify the expense.

The companies try and compete for the best exclusives to push their hardware. You may end up spending more money but you benefit with higher quality games in the end. Unless your too young to get a job then yes, exclusives are good for the consumer.

I agree with your point in principle... the probem is how many exclusives actually do so?  Maybe a handful?  Uncharted or something like that?  But Bioshock could easily be on the PS3 and nothing about it being exclusive seems to have led to excessive leveraging of j360 HW.  Dead Rising could very easily be on PS3 and definately didn't push anything HW wise.

The fact is that too many exclusives are for the companies involved and are deals that do not actually translate to better games for that platform - i.e. a benefit to the consumer.  Lost Odyessey is just the latest example - paid for exclusive which will actually sell less and reach smaller audience as a result.

If a game is genuinely developed for a platform (so RFOM2 looks like it would take serious effort to put on 360, and obviously most good Wii games couldn't go to PS3 / 360) it would be different but all too often exclusives don't deliver on that promise IMHO.

Lol that's so funny.  As I stated in another post the fact is most exclusives do not push the HW.  Are you really telling me Dead Rising pushed 360 and couldn't be on PS3 - or even Wii?  Exlusives are supposed to be about pushing HW to benefit consumers but while a few do most don't.  Most are commercial deals that benefit the companies involved but rarely the consumer (again, I'm not including obvious 'exclusives' like Wii Sports in this).  To me there are two types of exclusive:

a) R&C, Halo, Wii Sports - obvious exclusives due to owned IP or intent to try and maximise for a single platform

b) Dead Rising, Bioshock, Lost Odyessey, the DLC for GTA IV etc. - no reason to be exclusive apart from money changing hands as a blunt marketing tool to try and force the purchase of a particular console

Funnily enough I've just realised that most exclusives that come to mind in the latter category are 360 focused - guess I should really change my post to say is it really good for consumer MS is using money to limit availability of games that otherwise would likely be cross-platform!  Seriously though I see no reason why (unless they fall into a) category above) that PS3 exclusives like Haze shouldn't be on 360.  Let more gamers have access to such games and make sure the true exclusives really use every bit of the console as best they can for their maturity.  Like Uncharted - for me it really seemed to try and use every bit of power in the PS3 and I'm sure ND will only try and squeeze more out of the engine going forward.

BTW at 42 with a large salary I could easily have all consoles I want but I have a very nice 3 storey house that has been expensively decorated and 3 consoles cluttering up the space below the TV is not an option for me purely on asthetic reasons.

(although I will allow a Wii in near future in the kids room where they can put dents in the wall without bugging me)

Of course not all exclusives push hardware but the few that do are what make it worth it.
And when I said "companies" I ment Sony, Ms and Nintendo's first and second party games(uncharted/r&c, Wii sports) not just any old exclusive that they can secure one way or the other.

What was funny?

Exclusives are best for companies because they force people to buy their consoles. Nintendo for Mario games. Sony for Final Fantasy games, Metal Gear Solid games and Gran Turismo games. Microsoft XBox 360/PC for Halo and Gears of War games.
The exclusives identify a company to the consumers and people buy the games they like.

Exclusives are not bad for the customer, the mere imagination of the possibility of possessing all games you want is bad for the customer.

Exclusives are great when they are new IP's. But having heaps of exclusive sequels does not make much sense it would be more profitable to make multiplatforms of sequels. Sequels are made when an original has been profitable.

I love exclusives, when done right. Not all consoles are created equal, and when you have the freedom to develop to the consoles strengths, the consumer gets a better game.