The problem is that, if Microsoft wants to ever become the #1 console, it needs the entire market, and not just one piece of it. Casual games are an end to a means, but not an end itself. MS has a huge swath of hardcore exclusives, but we've seen from Nintendo that you can balance your portfolio out, and get new people into your console, while making tons of money.

There's nothing wrong with a Lips, Scene It, YITM, or other casual games. It becomes an issue when those are the only games produced that are 1st party, or exclusive. 2009 will be the best year for exclusives yet, I think. We're starting out with Ensemble (great studio)'s last great title. Moving on to one of the largest JRPGs (and it's exclusive), having a ton of hardcore titles in the middle, then ending (most likely) with Mass Effect 2 and Alan Wake. That's a pretty good year. So what if MS decides to launch another IP or two that's guarenteed a million copies or so? Viva Pinata started it all by doing very well over time...MS needs evergreens just as much as Nintendo does, if they ever want to become #1.

^^
Knowing what MS does once it gets first, Sony and Nintendo could even ally to stop it. Unless Nintendo feels strong enough to singlehandedly destroy XB720.

I wish nintendo was as not hardcore as ms is.

@Alby: It isn't Nintendo whose position is to "destroy" 720, it's M$ (and Sony) that go after N6 next gen.
Now that Sony isn't leading the market, it's much easier for M$ to go after profit, which is their next gen focus.

It's just business.  When you feel you've cornered a market, then you try to EXPAND that market.  This is why Wii will see more "hardcore" games this year as opposed to the last two years, and why Microsoft will plan more "casual" fare.  PS3 can't get in on the "expanding" action yet becoz as of this generation, they haven't been able to claim any major demographic, so they'll stick to their guns until they can offer MS some competition.  The line will get very blurry between consoles in the near future...especially when Wii gets a HD version of it's hardware on the streets.

@Signalstar: I believe the talk was about the appeal. It has high "casual" appeal.

Could you explain what makes GT one of the most hardcore enthusiast driven franchise by definition? To my observation, it appeals the most to kids who likes fancy cars, who drive their Corollas from the 80's and younger ones who don't yet have drivers licence.

@Hypnocronic: Wii isn't getting an HD version. Or do you have any logical reason for such to come? I mean, it's selling faster than anything so far, while Nintendo still experiences issues with supply and it's hardware is pretty irrelevant, it's sales are driven solely by software.

@BdBdBd

Your right about the Wiis success not being about the economy...but I believe its a phase...I do not believe the Wii can continue to put out all these cheap Mini Games and still be on top for much longer...but you CANNOT hide the fact that a parent that is tight on money is not going to go and buy a $250 dollar system than a $400 dollar system...I mean if I was a parent that would be my logical choice. Idk but if next generation gaming is going to be all about the casual games and every company releases an outdated system with a "cool" controller...I think my gaming days are over

Yep, in fact I meant that Nintendo could have this urge only if MS tried to get first place with the unbearable risk it could try to achieve monopoly after, otherwise Nintendo wouldn't waste its energies attacking (or better, counterattacking) MS, as facts show it does its best when it goes its way in the best way without caring about competitors. OTOH MS always tries to destroy competition if given the opportunity, it didn't change in 30 years under uncle Bill's leadership, it won't under monkeyboy's iron flying chair fist.