This is based on NJ5's numbers from his own thread (from VGC). I m adressing exactly the same question than NJ5 looking at past gen versus current gen. Basically I just have added some little operations to go a bit deeper in the analysis and show what I wanted to show. Thx for reading :

What is Competition  : people that are looking for the same thing.

A direct consequence of competition when the thing is limited : not everybody can get the "thing"

Here, in the console system, we can say the people competing are the Wii and PS360 (let's say) that both want to sell to THE (?) consumers crowd ("thing", measured by sales numbers).

If both are competing for the same limited consumer crowd, then we can assume higher sales for Wii will result in lower sales for the PS360.

If they are not competing for the same crowd, then sales numbers should not be linked/affected each other (both can be high).

(I took the NJ5's numbers as truth )

I added 3 numbers : 

- "sales lost by PS360" = (PS2 sales - PS3 sales) + (Xbox sales - Xbox360 sales) 

(sales that "disappeard" from the last-gen : wii says "HI !")

- BONUS : Wii sales - "sales lost by PS360"

- TRUE BONUS : BONUS - GC sales

(Wii sales that dont come from the "disappeared" sales or the GC sales) 

   Japan:

The PS3 is selling worse than the PS2 (losing by 3.5 million). The 360 is only winning by 150k vs the Xbox.

==> Wii sales : 5.96 M, "sales lost by PS360" : 3.6 M

BONUS : 2.4 M,

TRUE BONUS (put away GC sales (2.2M)) : 0.2M 

   Europe:

The PS3 is losing by 1.2 million vs the PS2. The 360 is winning by 1 million vs the Xbox.

==> Wii sales : 7.7 M, "sales lost by PS360" : 0.2 M

BONUS : 7.5 M,

TRUE BONUS (put away GC sales (1.8M)) : 5.7 M

   America:

The PS3 is losing by 4.5 million vs the PS2. The 360 is winning by 2.4 million vs the Xbox.

==> Wii sales : 11.1 M, "sales lost by PS360" : 2.1 M

BONUS : 9 M

TRUE BONUS (put away GC sales (4.2M)) : 4.9 M

CONCLUSION :

Japan :

"sales lost by PS360" : 3.6 M
True bonus : 0.2M

Without any doubt Wii is competing and hurting the PS360 (particularly the PS3 that is selling a lot lower than the PS2 (3.5 M sales lost !)). Even if we are not sure that people that bought a PS2 AND people that are now buying a Wii are the same, we can assume the Wii seems a lot more interesting for Japanese gamers. This is expected since Japan is considered as a very casual market now (compared to Europe/America).
It doesn't seem that the market has particularly expanded (true bonus 0.2M...). This is coherent with the idea that Wii is getting consumers from the PS2 owners.

Europe :

"sales lost by PS360" : 0.2 M
True bonus : 5.7M 

Wow, Wii was able to sell to 5.7M NEW people that were not in the gaming market, AT LEAST, at this moment of the console generation.  And if you consider the "sales lost by the PS360" are only 0.2M (!!), you understand Wii is not really affecting PS360 sales. Wii is selling like hot cake because it is mainly selling to new consumers or people that were not interested by buying a PS2/Xbox so early in the console generation. Whatever, PS360 sales seem not affected.

AMERICA :

True bonus : 4.9 M
"sales lost by PS360" : 2.1 M

Here is the mixed situation : PS360 has lost some sales (2.1 M) but in the same time the True Bonus is huge (4.9M !!). It is like Wii is keeping away some PS2 owners from the PS360 AND it is selling to a lot of new consumers, or at least, people that didn't have a console at this moment of the past generation. Without any doubt Wii is hurting PS360 but in a lower (relative) range than in Japan since a lot of Wii sales are "new consumers (4.9M).

                                SUMMARY :

Japan :
competition ? YES
great inhibition of the PS360 ? YES

Europe :
competition ? NO
great inhibition of the PS360 ? NO

America :
competition ? YES
great inhibition ? NO

Is the Wii competing with the PS360 ?

well, except in Europe, for the moment, Wii is strongly competing the PS360 since it has reduced their sales compared to last gen.

Is the Wii killing the PS360 ?

Except in Japan where datas clearly indicate the Wii is shutdonwing PS360 (PS3!) sales, it seems that America/Europe Wii sales, despite being HUGE, are, only, partially affecting the PS360 sales for the moment. This is particularly true in Europe.

FINAL NOTE :

We can also assume that they are both console competing each other and that, according to Wii, amazing, sales vs PS360 sales, the Wii is GREATLY outcompeting the PS360 . But remember, in competition, you have to go after the same "thing" : the same consumers crowd. In a way, it is the same crowd because we are all consumers from THE WW crowd, in a other way, it is quite different crowd because, in some area, PS360 are sellling very high despite their price and the amazing Wii sales.
Depending if you want to take, or not, in count these point, you will find different answers.

Good read libellule!

This doesn't take into consideration at all that the gaming industry grows each generation. Even when it is considered stagnant it still grows because gaming is becoming more accessible, reaching more countries, and the population of the world is growing quickly. Every generation the gaming industry has grown quite quickly, even when the industry failed to innovate or reach a new demographic. Europe being the youngest market of them all, we should expect a high growth rate there.

Oh yes, we needed the 10th thread on this topic! Sorry, do we really need a new thread for every view on one topic? Doesn't need 1 thread with all views?

no , the Wii choose is own way to the glory...

@johnsobas,

I agree, this aspect is very hard to check... I guess the main increase is direclty on the Wii sales since this is the "disturbing" console. This is what I call the "True bonus" in a way ...

@Just_Ben,

you are right. I was not sure if ii needed a new thread or if It just needed to be posted on NJ5's thread ... Since my conclusion are mixed (Yes and No) I created a new thread.

We have done this before, and the industry is growing, we are more supply constrained, etc.

Remember that Europe is now a lot more wealthy than it was before, and we can see that the market is growing insanely fast, making this analysis close to worthless.

Edit: Sounded a bit harsh, sorry.

Can a mod please lock this thread? It is a duplicate thread. it has been done a million times before.

for god's sake, not another one......

if it's not competing Ps3/Xbox360 then who is it competing??
if it was no, then Ds couldn't compete with PSP as well!!

also, it's pretty obvious they all 3 compete, as they target people who like video games, even if they are too old or too young!

The fact that Wii is focused on FUN and not on graphics, attracting more people does not mean it's not competing!!

@Leni,

""The fact that Wii is focused on FUN and not on graphics, attracting more people does not mean it's not competing!!""

==> 6M people who have bought GTA4 believe there is more fun in GTA4 than in Wiifit or Wiisport ... the "fun" notion is quite subjective.

I assume is reading my final point ...

@Rock_on_2008,

thx again lol