There is an extraordinailrily limited pool of people who can actually program well. There is an even smaller pool of people who can actually design a game worth playing. If it was a job anyone could do then we wouldn't have bad game ever made. It would always be a good game with no bugs and everyone would love it. Developer resources are decidedly finite because it is hard to make a great game.

And the competition is direct. What system was Monster Hunter 3 supposed to be on again? And where is the Dragon Quest having its next instalment? They are taking customers from each other, they are taking games from each other, and they are stealing developer time from each other. Direct competition.

 If you prefer PS360 games, you buy a PS360.  How does that effect competition?  More people want Wiis right now, for Wii games and Wii controls.  I don't get your point.  Wii will have FPS games, RPGs, and uh... tactical stealth whatever it's called games.

Besides, the Wii was the first system to have Solid Snake in a game.

That is an interesting spray of genres that I am guessing you mean to include the core gamer demographic. The Wii certainly does not have Metroid Prime 3, Red Steel, Conduit on the way, Okami, Bully, Star Wars: The Force unleashed on the way, Sonic and the Secret Rings, Manhunt 2, or any of those other core targetted games.

I bought a Wii... and until I get bored with my Wii games i likely won't buy a PS3 or 360. But I will when there is a software drought with the Wii.

That feels like competeting to me.

Then again I might get one as soon as Valkria Profile comes out.

They're directly competing for my time and money, and i plan to own them all eventually, though I may end up without a 360 if the games software keeps up as awesome as it's been.

So, yeah. I have direct proof they are competing directly. Me.

If Wii stopped making games, i'd shortly after buy another system.  So PS3's buisness would grow sooner.   

@TheRealMafoo: "This is true only if you can offer, to the same gamer that wants to play Halo, MGS, or FF, something that they would rather play. The Wii does not do that."

You are being bitter cause PS3 is not in the lead, move on man. Wii is clearly winning this generation.

Your excuse of "WII HAS NO HALO OR MGS4 THEN ITS ON A DIFFERENT MARKET!!!111one" is getting extremely old and annoying. It can be considered trolling so far, cause is the only thing you say.
An example of trolling like you do would be: "PS3 is not competing with anyone cause it has no Halo or Zelda, so gamers wont buy it cause they cant find anything they like."

You see, you just come here to bring the Wii down, everyone else notices it. And you're not accepting the reality.

Wii Bingo boards please!

 Now that shows where you are coming from. That is complete and total opinion. You would rather play MGS than No More Heroes, YOU would rather play Halo than Zack and wiki. The flaw is again in definition and assumption that everyone agrees with you. Gamers only want to play Halo rather than Zack and Wiki because by definition they aren't gamers unless they agree with that. Ok, what if they are a core gamer that would rather play zack and wiki and no more heroes over Halo and Gears of war? Can that not exist, are you not a core gamer if that is true?

Apparently the wii isn't competing for the "core gamer" because you aren't a "core gamer" unless you own a PS3 or 360. 

 The only way i coulda laughed harder at that would of been if you would of said "Need a jaunty cape."

Jaunty is a funny word.

It does for me. Though replace FF with Battlefield of the Valkria, Halo with COD4 and MGS with Borderlands.

Actually, i'll still buy FF13 and 13V... eventually anyway.

I assume that by direct competition the meaning would be that all customers are choosing between either a wii or a ps360. But I think that would be a really strange thing to measure.

True enough, the PS3 and the 360 are basically competing for the same customers. They are essentially the same thing, really. Most of the games are the same, and both sides have a couple of exlusives.

What nintendo has done however, is to expand their market. A lot of people that would not be interested in the MS or Sony consoles are in fact very interested in the Wii. This bigger market makes things a bit more difficult to measure.

I'm guessing what you would want is to figure out which Wii consoles bought was in that consumers mind competing with a PS360. That would be impossible to figure out. So the question is, in the 'traditional' gaming market, what is Nintendos market share? Answer: probably impossible to tell, especially by looking at sold consoles. If you look at what type of games are selling and how, I believe you with a little reasoning and tons of guessing could get a somewhat clearer picture of how nintendo is doing with that part of the market (though I haven't tried and won't try any guessing).

This sort of divisioning of the market would probably make the most sense. 'Casual gamers' and 'hardcore gamers', if you will.

But even though it would be the best way to divide it, I do not really think that there is reason to do so. How one calculates marketshare is different from person to person, there are always as many ways to divide a market as there are people. Consoles are probably competing against the PC in a way, and gaming in general is still competing with tv, sports, movies and other pasttimes for the money and time of people. So what IS the market is the first question. Once you answer that, you can start counting your competitors.

This is why the whole marketshare thinking is ridicoulus (argh... spelling). The best way to count success is how much money you are making. The second best is to count how many consoles you have sold (which is what VGChartz are incidentally doing).

Nintendo showed this when they launched the Wii.

They are selling to people that have never been counted as part of the video-gaming market at all. This means that basically, all the machines previous to the wii could have actually been sold to these people as well, if they had had the right features. These machines (as well as the PS360) did therefore, in my mind, miss out on a considerable part of the 'actual' video-game market.

wii is competing with ps2