If you say that Nintendo is not competing against Microsoft and sony, that Nintendo should use a similar online model like XBL, and where the hell Nintendo is going, this article will interest you:

 http://malstrom.50webs.com/shield.htm

I dislike reading his articles.  He may have one or two decent points but the rest is almost always complete and utter garbage.

 lol garbage? wow. well people hate to read the truth ;P

 I do the opposite. I do enjoying his articles because even though they are written very "dramatically" they make much more sense than the ones from 1up.com, kotaku.com and others ones that makes you think that are written by teenagers. Is obvious that that dude does a very good research and has his feet on the ground.

After the fiasco I got with videogame journalism recently, is good to see that are a few out there that think before talking. 

I agree with the buffalo. His style is really irritating, really really irritating, so much so that it's hard to take him seriously. But the actual info and points in the article are well researched, and well thought out, and he makes a large number of good points. But it's still really annoying to read.

Its a disturbingly good read, and I do agree with most of it (as much as it sounds like preaching).

I noticed this in particular:

...
-Second is the ‘counterattack’ by the incumbents.

-Third is the fallout from the counterattack. Most of the time, the counterattack is unsuccessful and the incumbents are made *gone*
...

Its still early, but in many ways I see GTA4 as a failure. It sold plenty of software - but has failed to lift weekly hardware sales (the new Europe sales for the PS3/360 are now lower than they were 4 weeks ago).

And to counter this, WiiFit is only starting to weave its magic - and hits the US this week.

@shams

GTA4 didnt achieve what many people wanted it to achieve with hardware, but "I see GTA4 as a failure" isnt really an applicable comment when the game sold over 8 million on two platforms inside a month...

hmmm.... i didnt read the whole thing as i found it annoying and far too long. so perhaps ive missed something due to not reading it all but...it sounds like wii = "casual" ps3/xbox = "hardcore" and due to the fact that the wii has more sales than either system it has won and the others are failures. and the market will become casual and nintendo is god of the universe and microsoft and sony will bow and worship them.

so perhaps ive misinterpreted that, and if someone someone can enlighten me as to what it was really about that would be nice...

but my thoughts on what i read:
when you divide "hardcore" and "casual" like that...the "hardcore" have a larger market - sales of xbox+playstation beat wii by a fair margin. therefore the "hardcore" is beating "casual" and wii is a failure?
why would "casual" become THE market rather than part of it. what would become of the majority who chose "hardcore".
both those systems are doing well so they are hardly failures.
redoing old ideas (however more effectively and successfully they have been implemented) does equate to revolutionary.
adding to the market does not destroy the market already there.
hardcore and casual are horrible terms. they dont accurately describe anything.

 And i agree with you

@WoW

I'm sure we both know it's easy to dilute an entire novel and call it garbage - mind explaining why it's garbage? I promise I'll read your half an hour long response, because if it's any bit short of that; it probably wasn't a well thought out reason, which would mean you didn't think out why it was garbage.

@OP
By the way that entire article total garbage =P
He did hit some very strong points later on, the repetition was there, it's not as easy to teach people context as it is to teach them content or bad habits. By the way someone posted this before - and linked both sword and shield.

Those are not his point at all, and he doesn't make the division between casual and hardcore as such, he talks about the new values versus the old values. There is so much stuff in his articles that it's hard to summarize them well, and to be honest, I don't agree with everything he writes, but mostly it is well thought out and researched stuff. Anyway, I'll try to summarize the main points he makes.

Nintendo has, on a fundamental level, different motivations for being in the VG market than Sony or MS. They are not trying to accomplish the same things, and this asymmetry creates a shield for Nintendo against counterattacks from Sony and MS, because even if Sony/MS copied what Nintendo is doing, they would be doing it for a different reason and they would be trying to accomplish a different objective, and this mismatch between the end and the means is what would make them most probably less successfull than Nintendo.

Nintendo is working on to change the whole value system surrounding video games, and it is quite evident that people are buying into this new value system. That, coupled with the fact that Nintendo has the most profitable business model of the three, means that Sony and MS can actually do very little to counter Nintendo. It's quite obvious that they can't change their value system to match the new value system Nintendo is pushing, lest they want to alienate their current user base. So, Nintendo can roam pretty much free and establish the new value system while Sony and MS will try to maintain the old value system, with only some minor changes that won't scare off the "hardcore" and thus, won't really change the situation.

The underlying concepts, or theories if you will, behind Malstrom's thinking are the Blue Ocean Strategy and Disruption. Unless you have a pretty good grasp of those, which I don't claim to possess myself, then you won't be able to understand what is really happening. Anyway, the basic premise is that Sony and MS are overshooting the market, they are offering much more in terms of horsepower and features than what the general consumer is ready to absorb. This is what created the opportunity for Nintendo to disrupt the market. Now, Nintendo is actually offering less than what is the absorption limit, hence the seemingly "crummy product" that is the Wii, but not only is Nintendo offering less, they are offering something that is fundamentally different, and they've aligned their whole strategy around this difference, and that is taking them into the Blue Oceans. And, for those markets, what they are offering is completely satisfactory, and with time they will push the technology and software further as consumers become ready to absorb more.

Anyway, that's my take on the Malstrom articles so far. There's loads of things I didn't even touch, so even though they are a long read and sometimes the writing style is deliberately pushing the buttons of the "hardcore" people, I still recommend reading through them.