If I can channel Sean Maelstrom for a second here, what Microsoft would need to do is come up with another disruption. What that is, I have no idea. Perhaps Virtual Boy 2.0????

@noname2200:

Young man, you go to your room and you don't com out until you have a 10-character post about why the 360 is "teh sux" and the Wii is "pwnzor"

You will be graded on this assignment.

@Killergram:

I respect a man who bases his opinions solely on what he's played. Bravo, sir.

If there was a wiimote-copy for 360, there would be no reason to own a wii.

Speaking from what perspective, though? The topic title and OP implies that all answers concern Wii/360 owners, one of which I will be (again) within the next few weeks: are you saying that Wii owners would see no reason to own a Wii any longer?

I think the first thing it would have to do is abandon the idea of a "casual" gamer. Nintendo's apparently adopted the philosophy and terminology of the "core" and "expanded"  (note that they never use "hardcore" in their interviews or releases. Or at least, almost never, save for an occassional slip by an individual employee).

I know it seems superficial, but there's actually quite a bit of reasoning behind it. The "casual" moniker carries with it a lot of negative connotations of customer stupidity and creator superiority. Look at Epic Games'  or Harmonix's use of that term, for instance. Even Ubisoft, who relies on what they call the "casuals" have only recently began to think that it was a market worth putting effort into (their president admitted as much a few months back, when he assigned the Wii Petz game to an actually talented team. For once.)

This matters because it leads to a different take and perspective on your customer. Microsoft so far has treated the mass populace fairly superficially. Games meant to appeal to them, like Scene It! or In the Movies, are not made by their best teams at all. They're outsourced to C- and D- listers, and it shows. By contrast, Nintendo has its best working on games for the expanded audience, like EAD, because it has some respect for that groups' taste and intelligence.

But that would only mark the beginning for Microsoft. In addition to reassigning some of its top talent, it would have to work on its marketing, its image, its very approach to gaming, its ultimate goal, and more. I can continue, if you're interested, but I don't want to bore you if you think I've rambled on too long.

And of course, these are just my thoughts. They could be, and probably are, at least partially off.

Looks like my opinion actually varies a bit from the rest of the 360-crowd...
And in case of any potential rebuttals, I play my the 360 a lot recently...

What reason would there be to own a wii? Few mario games and that's about it.

I can only assume, sir, that you are not serious: after all, the Wii's library is almost entirely separate from that of its competitors, and will remain distinct for the lifetime of the consoles, and would remain distinct even if the Newton were released tomorrow.

You should be careful of your light-hearted larks, sir, some people may be offended.

Honestly I'm thinking of selling my Wii right now on eBay because of the higher-than-MSRP it's demanding on there currently. When things get back to normal I'll probably rebuy...I'm hardly playing it compared to my 360/DS/PC anyway.

I don't think that would work. Disruption takes not only an innovative company, but also good timing. Remember, disruption is meant to bring back to earth an industry that has overshot the majority of its customers' needs. Nintendo has already done that, and it seems pretty intent on continuing the disruptive wave before anyone else can beat them to it. If Nintendo makes a mis-step, they'll be open to disruption, but at this point I don't think its possible to do so without Nintendo first dropping the ball.

More importantly, disruption is at least partially anathema to what Microsoft wants in the gaming market. It didn't enter gaming for gaming's sake alone, it entered to halt Sony. It's losing its focus there, mind you, but unless it wants to completely cede the techno-philes to Sony (and risk further inroads by Sony into Microsoft's REAL market) it would not be wise to pursue disruption.

Unless it finds a way to have its cake and eat it too. I don't see how, but then there's a reason I'm not going into business.