Ummm, actually they can easily steal from Sony, not so easily from Nintendo, its called product differentiation, a 360 can easily replace a PS3, a 360 and a PS3 can't replace a Wii, if you want Wii a PS3 or a 360 just won't do, if you want a PS3, well a 360 can easily replace it, since they have such similar capabilities and libraries, Wii is totally different, Nitnendo will keep seeing its marketshare grow this gen, Sony will see it shrink

I just wanted to antagonize those people who believe that MS is still in the pocket of "core" business. The avatars, currently used by 360 users on forums and other sites, perfectly sums up the blatant hypocracy of attitudes towards the Wii. Nothing more amusing than somebody tearing Nintendo apart while their avatar looks so cartoon like and appealing.

How could you possibly believe that one is any different from the other. They are designed for the exact same reason. Yet when affronted with the suggestion, that MS is actually going casual, you are ultimately in denial about it. Think about it though, they promoted Lips and YITM at E3 for a reason, and it was not to compete with Sony.

 You just don't get it do you. With every gen Microsoft grows smarter as far as the console market is concerned. They aren't going to target Nintendo so Sony can get around them. One of their premiere goals is to always keep Sony down and slowly move towards Nintendo. Microsoft and Nintendo have a healthy relationship, which is why Microsoft is trying their best to crush Sony this gen and keep them as far away from Nintendo as possible. Microsoft ended struggling with nintendo, unlike Sony who remained in 3rd and was delusional enough to believe they can recoup over 20 M+ consoles to beat Nintendo. Next gen will be a different story and the 720, PS4, and Wii2 will be different pieces of hardware. I'm sorry, but I don't believe Nintendo should change the style of hardware. They should just make an HD version with higher capabilities and a newer arrangement of 1st party games. Microsoft has got the picture of what the casual audience would want, but they need to bring it to life instead of half-assing it. Sony needs to get off of their ass and think about what the casuals really would want, instead of forcing formats on people, instead of giving the people what they want.

Microsoft has advanced itself only through Sony's mistakes and not because of its own brilliance, and even then, it hasn't done a very good job of taking advantage of those mistakes considering that it's barely outsold the PS3 since it launched. So tell me, what happens when those mistakes aren't made by either Sony or Nintendo?

of course they will, Nintendo have won this generation and MS if favourite to come second, MS will obviously want to dominate the console market like they have done the PC market, so its natural for them to go after nintendo next generation, from the point of view of gamers, i think its good for the industry to have competition, which is why i also hope to see another Sony console, competition makes the companies come up with new ideas (like the Wii) and better technology (like the PS3) as well as better games (like the 360), thats my opinion anyway

Wow! I didn't expect this much of a discussion to crop up--I didn't expect it to get past 20 posts, let alone having so many who actually agree with me (and yes, I did actually read every single post )

What I was trying to say before in my OP was this:

Microsoft, for all their strong points, is not an innovative company--they are an imitative company. They saw what was working for Sony, and tried to improve on it. They also took the same thing that worked on a PC and made it into a console.

That's why I believe they'll try to follow Nintendo's successful strategy next gen (hell, we're already seeing it this gen XD).

It would be foolish of MS to put all their eggs in one basket/market.
If they just imitate Nintendo and go all underpowered and casual then it will leave a fairly large hole for a competitor to move into and that could even be the resurgence of Sony ironically.

However I think next gen will be fairly easy for MS to play both fields quiet well. HD will be far cheaper to implement and a GPU that can render Crysis type graphics at 1080p will be relatively cheap in 2-3 years time. Plus it will also be cheaper to implement 1:1 gesture based controls in addition to a standard controller. Nintendo have admitted that Mii Motion Plus was their desired launch control system but it was too expensive. Now only 2 years later that desire is a reality in the form of a cheap add on so imagine what can be done for that price in another 2-3 years.

Microsoft don't have to inovate too much next year, their Live platform is already a market differentiator and software development has always been their forte. Don't aim to please a specific market, aim to be able to please everyone.

@Infamy

There are still risks inherent to being the 'jack of all trades master of none' as you could be neglected by both sides. I wholeheartedly agree with you as to this strategy but I still feel that the majority of consumers seeking a casual kid friendly fix will likely go with the Nintendo successor again, for it's specialised and subsequently larger library of games that appeal to a younger demographic. Maybe the features of the bundled games will be the differentiating factor - 'Wii Sports vs X Sports' in which MS will have to do more than just imitation but innovation to win here.

I agree with you, but I think Microsoft need to do it because we know that they want to be out in the market place first and it means that they have all bases covered. I think a lot will depend on Sony's performance in the next 24 months and their ability to respond. It's very unlikely that Sony can release another super powered console in the short term so will Microsoft move to cover this market?

I think Microsoft & Nintendo could cohabitate in the market place reasonably well, Nintendo focusing on casuals yet still releasing core titles for their fans and focussing more on new experiences. Microsoft with a more set top box approach with more traditional features, higher end graphics and better online but still have their range of motion games, musical rhythm games and other more casual focussed titles. The PS2 was probably the best example of the perfect set top box type balance, so there's definitely a market for it, the PS3 just clearly pushed it too far.

Even in 2-3 years we won't need to get any better resolutions on a TV screen than 1080p and the hardware required to run that will be far cheaper to run 1920x1080 natively than what there is now. This will make it far easier for both Nintendo & Microsoft to blur the boundaries between the core and casual markets by offering HD performance in a console that is still mass market price.

You greatly underestimate the loyalty of Nintendo customers. Not just to the company but to the style of play and control. MS will lure very few back to game pads and if they go motion then they lose hardcore. Not to add that MS is not the most trusted and beloved of companies to begin with.