Am I in crazyland?

360 is already the cheapest console! And it has more features than Wii. So they've won on "features" and they're ahead on "price," but are 360s selling like Wiis?

Wii doesn't compete on the traditional model of price drops and more features. So 360 and PS3 can do all they want to compete on price or features, and it won't affect Wii.

Nintendo doesn't plan to ever drop the price of Wii or anything else. Wii doesn't make profit on hardware as a "buffer" so they can drop the price at a whim to "counter" MS or Sony. Wii is priced where it is because consumers place that amount of value on it, and Nintendo's plan sell more Wiis is to keep adding value, not to cut price. And they don't create more value by adding different features, they do it by introducing more unique gaming experiences.

In fact, I fully expect that one day Wii will be the most expensive of the 3 consoles, but will outsell the others by an even bigger margin than it is now. The value of the other consoles is in technology and features, where they will be surpassed by other things, but the value of Wii is in it's diversity of new gaming experiences. Viva Pinata and XBLA and Singstar and Buzz are fine, but Sony and MS don't have the vision to (consistently) create new experiences with the appeal of Brain Training, Nintendogs, Wii Sports or Wii Fit.

@mrstickblall: Then I can assume that MS and Sony are in to lose money. That's not very wise, share holders will not be happy to about this dont you think?

I could see someone actually making a case that MS will never profit from the Xbox line.

Nintendo is killing both Sony and MS this generation. And blu ray did not prove to give Sony any edge over the Wii, because in terms of consoles games are still the most improtant thing.

true for sony

false for ms

MS just did

Well 360 has been cheaper than Wii since spring, but that's not excactly a price competition, since Nintendo didn't drop Wiis price.

As for the capability to price competition, i don't see either Sony or M$ to be able to start a competition. Nintendo is on its way of making 4 billion profit this year, so they could easilly take 2 billion hit from hardware and still make huge profit. Which means, that if we assume Wii would cost 100 to make, Nintendo could give away 20 million Wiis for free this year (while still making hefty profit).

And for M$ making money with Windows, they propably aren't going to support the gaming division for long, if it can't turn profit, since M$ knows it has pretty rough ride ahead in the next 5-10 years, so they need the money they have and M$ needs to keep its investors happy by making a lot of profit.

Two things:

 - this isn't 2004.  Nintendo is making massive amounts of profits and dramatically increased marketshare in the past several years.  "Stay afloat" is not even on the radar as a consideration.

 - many people's eyebrows raised in 2006 when the Wii price was set as high as $249, remember it's two Gamecubes duct-taped together.  Do you not think that massive economies of scale haven't make the Wii cost even lower.  I've always considered the Wii to be the new Commodore64 as much as anything else, as it would be murder to attempt to compete on price: MS in 2008==TI in 1983?

Ah,  what you you mean by Nintendo "gaming division"?  They aren't structured like MS/SONY.  I was not aware that gaming was a subset of the company?  {smiley}

Next year the PS3 will be priced at $299 which will make it compete with Nintendo.

 Not if the wii is $199 or lower by then