QFT.

I don't doubt an HD Wii is in the works, but unless Nintendo can make HD Wii games compatible with the existing Wii, I don't see them releasing such a system in 2009. I think it's contingent on the idea that PS3 and 360 will become more popular along with HDTV - but so far that has definitely not been the case. In fact the longer Wii is on the market, the more it sells - and vice versa for the HD-capable consoles.

As for the idea that Nintendo isn't competing with PS3 and 360 - that's exactly what Nintendo wants you to think - it makes it oh so much easier to take over the industry by stealth.

The fact is, PS3 sales are horrendous compared to PS2, and 360 sales are hardly better than the original Xbox. Meanwhile, Wii is picking up the slack at an amazing rate.

A) You would have to be crazy to think that Nintendo R&D isn't already working on ideas for their next generation.  When you have the kind of corporate profits you have now, you spend a lot on R&D because you can cover the costs.  I assure you they are working on ideas for their next generation of video game systems and controllers.

B) Maybe so, but I stand by my argument that that they really aren't competing for the same gamer.

C) PS3 sales are horrendous for one reason:  Price.  This is where I belive my argument that they AREN'T competing holds water.  Th $600 PS3 and the $250 Wii were not competing for the same set of gamers dollars.  One was and is chasing nintendo faithful and casual gamers.  The other is chasing the cutting edge gamer.  Two completely different audiences.  If the PS3 WAS competing with the Wii, they wouldn't have been priced at $600 and they certainly wouldn't have the level of hardware they do now.  At 299, for instance, a PS3 could have had decent graphics hardware but no blueray and they probably would now be competing with the Wii...

The problem is, if PS3 sales suck for another year, third parties are going to lose (more) interest in it, and then who's going to want to buy it even at the same price as Wii?

PS3 would definitely be selling better if it was cheaper - but the $300 pricepoint is at least a year away, more likely two years. In that time we'll see MGS and Final Fantasy and Gran Turismo, but history has shown that a few mega-exclusives won't save a console (N64 and GameCube).

I think PS3 isn't gonna get to $300, $350 at the lowest

 alpha has it right...  even for those who buy two or more consoles...  For myself, I am likely to buy two consoles, but not all at launch...  I picked up a wii and I am happy with it, so will likely not get a PS3 (or 360, but I am biased against MS, so not likely for that anyways) until the price comes below $199 on ebay, and/or probably not until I am guessing 2011 if it starts to become the market leader...

Given my current disatisfaction of the PS3 titles combined with the high price, the earliest I would consider a PS3 is this upcoming holiday season (little better game selection), or early 08.  That would be if if the wii didn't exist or compete but it does...

Now the wii delayed my purchase of a PS3 by probably 3 years (if not more)...  On a per month, I am only going to spend so much per game.  I don't generally rent, but buy games. As long as I have a wii, at least some of those purchases are going to wii titles competing against other consoles I own.  For those few years where I delayed purchasing a PS3, those sales all go to the wii exclusively (ok, some goto PS2, etc...)

A) I agree Nintendo is almost certainly doing R&D for the next console. That does *not* mean it is going to be released in the next 5 years even.

B) Whether or not they are competing for the same gamer, they are competing for the same gaming dollars. Every game that is released on the Wii is a game that is not released on the PS3/X360 (Okay, not really... but the vast majority). Most game sales come from casual gamers - you don't think that the hardcore gamers are the only people that bought GTA, do you? When a developer has a choice between a large casual audience and a smaller, higher-attach-ratio'd hardcore audience, at a certain point (not sure when it is) the large casual audience will win out. Especially because there will be *SOME* hardcore gamers among that casual audience.

IF a game that is predicted to sell well is released on the Wii instead of either the PS3 or the 360, that is basically money lost in the eyes of Microsoft and Sony. They don't see a cent from it, and the aid that it would have done to their loss-leading strategy doesn't arrive. The sales calculus will shift to the Wii at a point in the not-to-distant future -- if it hasn't already done so already.

C) I agree that one reason the PS3 is not succeeding right now is price. I do not believe this means that Sont is not competing with the Wii -- because like it or not, even in an expanded market there are only so many people that are going to buy consoles, and whether or not they want to compete with the Wii is immaterial because they *are* in competition for the same games and they *are* in competition for the same gaming dollars. If someone has both a PS3 and a Wii, statistically they will not increase the number of games they buy by that much. So where if they only had one system, say they would buy 10 games total (pulled out of my ass). If they have two systems, they may only buy 7 games per system -- total games went up, but one of the consoles lost 3 games worth of profit.

That is why no matter how you want to cut it, Sony and MS ARE in direct competition with the Wii. There are only so many entertainment dollars out there, and every time someone goes to a competitor it is a potential lost sale.

For example. the thread a few days ago where someone was asking if they should buy an X360 or tons of Wii/DS games. Either way that individual chooses, one of the companies is losing out on sales. That wouldn't happen if they were not in direct competition.

One more comment on the "not competing" debate - see PSP vs. DS. Nintendo and Sony both insisted for the longest time that the two handheld weren't competing, but I don't think anyone would argue that now. In fact DS literally "stole" sales from PSP last year when Sony had to lower sales projections and Nintendo cheekily raised its own sales projections by the same amount a couple of weeks later.

The fact is, if you're making a video game and I'm making a video game system, we're competing. Consumers have a finite amount of money to spend on video games, and third parties have a finite amount of resources to commit to game development. DS taking Dragon Quest IX from Sony goes to show that even the cheapest systems on the block are in competition with the most expensive ones.

Edit @Soriku: I'm not sure if you were talking about PS3 and Wii costing the same amount at the same time - I agree that will never happen, but I do think it's possible for PS3 to reach the $250 mark in its lifetime.  Probably not until 2010 or 2011, though.

 

Certainly I can see that install base causes console titles to shift from one to the other... Indirectly, that certainly puts a dent in the loss leader approach as you mention.  That isn't direct competition though -- but the result of market dynamics over time.  I'm more speaking to direct competition, at the retailer.  I doubt very seriously there are too many people walking into gamestop/eb games and trying to decide between either a Wii or a 360/PS3.  MAYBE a few between the Wii and the 360 because their prices points are lower...  It's like saying a Honda Civic is competing with a Mercedes Sedan.  Yes, they are competing with eath other as a car manufacturer but they aren't competing for the same set of consumer dollars.  The person buying the Civic might like to have the mercedes but the cost puts it in an entirely different market -- a niche if you will.  Currently the PS3, primarily because of price, is a niche and not a mass market device and hence I will stand my ground that they aren't competing for the same consumer dollars. (directly at the retail level). 

But your arguments are solid none-the-less and are probably right, too.  Meh... nuances and hair splitting.

Everyone knows that Nintendo is working on the system that will follow up on the Wii just most people don't expect it to be released until 2010 at the earliest (most likely in 2011 or 2012) ...

For the most part it takes 18 months to 2 years before a console is released to correctly market it to its customers and third party developers; that is if it is not a minor hardware revision like the Slimline PS2 or DS Lite. This would mean that Nintendo would have to start marketing a Wii HD sometime between Q4 2007 and Q3 2008 if they intended to release it in 2009. That simply wouldn't happen ...

A Wii HD could potentially exist but it won't be much more than a fancy way of upscaling the graphics