i don’t have a next gen system yet but, i think that if you buy a console and feel that you need another to complement it, then those two are not competing with each other. if i buy a ps3 /360 and feel that i need a wii to have a fully entertainment experience then they are not competing among them self and the opposite is also true if i buy a wii and feel the need to buy a ps3 / 360 . I think that’s their point,  since is unlikely that someone that buys a 360  may thinks it needs a ps3 to the full next gen experience, that person rather buy a wii.

First, there are some valid reasons to say that DS/PSP are in different markets. Really there is no such thing as two products in the exact same market: that would imply that 100% of the people who might be interested in product A are interested in product B. For example, what about the people buying the PS3 as a Blu Ray player exclusively? They aren't and never would be in the market for a 360, for example. Therefore the 360 and PS3 markets aren't exactly the same.

The Wii and PS3/360 markets overlap significantly, but also have a significant region of exclusivity (with the Wii having the lion's share on that front, for sure). If someone said: "The Wii and PS3 have significant overlap, but we think there is also a lot of distinct features in the PS3 that appeal to a high end tech market, which the Wii does not attract," that would be about as realistic a statement as I can come up with.

But of course, the real reason Sony/MS say such things isn't because there is a small amount of truth to it (which obviousy favors the Wii more than it does the 360/PS3, financially speaking), or even that they're sore losers -- it's because the job of a PR person is to pain their product in a positive light.

What you call "whiners" or "sore losers" I call "PR people doing their jobs."

@bodhesatva , that perfectly articulated what my mind was saying.

Nintendo is no competition to Sony and Microsoft BECAUSE
1st - they have many industries that they are in. There is no reason for EITHER Microsoft of SONY 2 drop out because even if they make almost no money with a generation console, they make HUGE amounts in their industries. Nintendo however has NO fall back!

exactly and that is why nintendo's hardware has to be profitable and thats why sega had to get out of the hardware making business they have no fall back.

@Gearbox , good point and too elaborate Sony and Microsoft are far more diversified in their markets so they can afford to operate with divisons making losses year on year which means they have more capacity for long term success.

If Nintendo flop the next 2 generations it could effectivley kill them wheras Sony & MS's shareholders wouldn't be happy about it but they could live with it. Short term Nintendo is pretty well off however in the long term their future is uncertain .

sony refuses to consider wii "winning" because the wii costs 1/2 as much as the ps3. once the price of the ps3 is around 200, i think ps3 will easily win this gen.

1. A lot of people thought that Nintendo did flop with their consoles the last two generations.

2. It didn't effectively kill them.

3. Your analysis seems short-sighted.

And the Paradigm Shift continues.