The Wii is directly competing with the other systems because they are all selling video game systems right? Oh wait, the Wii is a type of cereal. Okay , I see your point.

I'd probably say yes and no.. yes in that it's in the same gen and are the same type of product, but no in that PS3/360 are very similar in what they offer and their overall goals when compared to the Wii. So I guess one could really look at it either way, depending on how it benefits them.

Not only is the Wii competing, it's the ONLY system competing, since everything else is just sleeping with its thumb up its ass by comparison.

I don't think the Wii is "directly" competing with the 360/PS3, at least in the sense that it's not as direct as the competition between the 360 and the PS3. I have a PS3 and a Wii. The question "Should I buy the PS3 or the Wii?" doesn't seem as common as "Should I buy a PS3 or a 360?"

So is the new definition of "competing" currently "making products so similar nobody can tell the difference" and if you make a unique product that sells better that's somehow not competing? Making a unique product is SMART COMPETITION. It's working. It's winning. Accept it. You'll be able to sleep better.

@ Rubang. It's a spin that people put on things to make themselves feel better. If The PS3 or the XBox 360 were dominant, the Wii would be competing with them. Trust me on this one. Even though the Wii is outselling the other two systems by a wide margin, I have to put up with GTA 4 owns MKWii threads. See what I mean?

IF it is true that they don´t compete then Xbox won last generation and is winning this one.

Jay go MS!!!!

if Wii doesn't compete with the then I can say
PS3 doesn't compete with 360 because it has Blu-Ray and the 360 doesn't
Therefore, Ps3, 360 and Wii all compete solely with themselves

Overall, yes.  As you break the gaming market down into various sections, no, not as much. 

To me, the best analogy is trucks versus cars.   If you are mostly interested in what a truck can do for you, then you buy a truck.  Or perhaps if you can afford it, a truck and a car.   Cars can do somewhat the same things as a truck.  They can carry a bit of a load, can drive off-road if the terrain isn't too bad, etc.  Yet more cars sell than trucks, because they are easier to handle, and do a few things better than trucks do.

Overall, if you are looking at the very big picture, do all of the consoles play video games (do cars and trucks transport people and things?), then yes, then are in direct competition.

If you are looking at the individual market groups, very casual (female, older adults) not that much direct competition, Wii has won that market.  Young, close to the same again.  Very hardcore goes to X360/PS3, with Wii getting those that after buying one of those, decides to get the Wii as a second console. 

Probably the only market that will get the most competition is the current PS2 owners that haven't gone on to buy this generation of consoles.  PS3 fanboys would like to believe that they will go on to buy PS3s once that console gets cheap enough.  And a lot will.  But some who might have decided to stop buying new consoles as they got older, might instead by a Wii.  And as the Wii starts getting more and more games (like the PS2 did), with a wider variety to match its wider audience,  some of the more casual PS2 owners will splinter off to the Wii versus buying the mostly hardcore only games of the PS3 or X360.

who else are they competing with?