Two problems. First, you do not see the importaince of software. The other is that PS3 sales haven't never been on high.

Nintendo's strangth is that they are a hardware and software company. This means they can design the hardware around desired software. The industry is nothing without software. You may think the Wii Remote is disruptive on it's own, but with out software to attrack a new market, then there will be no disruption. So Nintendo way to cut up market is going to be more software, namely software that utilizes the new values of the Wii. Think about this: Wii Fit is a disruptive product, but it doesn't focus on teh Wii Remote, but the balance board. This is disruption not using the Wii Remote. To say that the Wii as it is in 2010 can not move upmarket is to say no disruptive product can move upmarket. The reason the upper market refuses to use the Wii is becuase it is not good enough yet. This is why Motion Plus exist. MP makes the system better, and Nintendo can makr better software for these more demanding customers. The upper markets do not want gester based controllers or tilting the controller like a steering wheel, but they want to have the motion control to be 1:1. Zelda Wii is disruptive in that it uses the disruptive qualities in a new context. The Wii will move upmarket by providing the experiences these more demanding customer want, which is more precises motion controls in deeper games (not nessisarily games with big stories, graphics and cutscenes).

As far as the PS3 goes, it has never been on Nintendo's tail. In the US, the Wii has done leauges better then both the PS3 and 360 and it's software has always dominated the top 10. There was never an increase in demand for the system but an increase in quanity demanded, meaning new users didn't enter the market space, just those who were on the fence. So the "Wii is Doomed" was never justified.

I do agree that that could be the potential brilliance to 3DS 3d. 3d without the glasses does make 3d a lot more palatable for me personally (though it still doesn't especially excite me), but cheap 3d without glasses could be ruinous to the attempts at getting expensive Blu-Ray 3D into home theatres, or getting that value to spread downmarket from the home theatre buffs.

About 2 and 3, I agree about the long term, but the short term results (considering also that despite the good sales, PS3 is still 2nd WW weekly) could be what Christensen defines buying time, while middle term moves are refined and about the longer term we don't know enough, yet. The key is that we don't know enough yet even about next Autumn moves of the three competitors. It is very true, anyhow, that if Sony thinks it can afford to remain as nimble as a hippo outside of water, it will fail.

About 1, if Malstrom underestimated some Nintendo moves, it could be doing it also about Sony. He's good, often very good, but not infallible. He did better predictions than most analysts, he's 100% right about the foolishness of some still pretending Wii's a fad, but starting from PS3 cut he did one excellent prediction, about NSMBW, but instead things that he used to strongly advise against turned out to be beneficial for both Sony and Nintendo. We're talking short term, true, but being long sighted means considering the long term, not completely ignoring the short and middle ones, and about the long term, neither Nintendo nor Sony let leak too much. If Sony has good moves to make it won't phone Malstrom to tell him, that's for sure.

Yeah.

I don't like Maelstrom very much personally, but when he does his business analysis (instead of game criticism) he tends to say some pretty insightful stuff. I don't know if that is Nintnedo's actual strategy, here, but if it is then things may become very interesting.

Agree. 3D using special glasses is not the future, and the fact that people is willing to wear them every now and then to watch some 3D special effects rich movies like Avatar is misleading TV manufacturers.

Well about the first point: Software is the key for success for every gaming console. I just thought this is so obvious I didn't need to point it out in my post. I also know Wii Fit is a disruptive product. But still Nintendo can't just move upmarket by releasing some new games. This isn't going to convince a lot of people. Some, yes. But not a lot. When Nintendo releases their new console that will be the time for them to agressively move to higher market tiers. They can prepare for that now and even do some small steps but they won't be able to get a lot of PS3 owners on board because the Wii was never about higher tier customers so far. (Unless this is going to be a huge push for motion+ games, which I doubt as they'll have to use a lot of their resources for the launch of the 3DS)

The hardware is the basis for the software. Whatever software you plan to release it has to be made for the hardware you developed. So the hardware is just as important because certain software can't be made for your current hardware. From desktop publishing to digital cameras - most disruptive products had to evolve before they started to threaten the incumbents. It is normal for disruptive technology to undergo a number of iterations before they are able to get high demanding customers on board: digital cameras were low-res, personal computers were not powerful enough, steamships were only used for things other ships couldn't do, LED's were so weak you couldn't use them for anything, and so on... I know software is important and I know Nintendo will move upmarket through software. But the time for them to agressively move upmarket (through software!) will be the release of their next console. So we basically agree here, I just wanted to point out how important the launch of their new console as the basis for their software will be I don't think hardware is more important than software. I just think that new hardware will give Nintendo the basis to agressivel target the higher tier market segments because currently this is pretty hard for them.

About the PS3 thing: True. But Playstation 3 sales increased nonetheless. I wasn't trying to analyze why they increased, I just stated there was an increase (especially in Japan) which Malstrom doesn't aknowledge to exist. I don't think the "Wii is doomed" is justified, either. Actually, I think the gaming media is trying to interpret everything in a "Wii is doomed" way, whether it makes sense or not. But this time they have good PS3/Xbox360 numbers to back their claims up and they can also point at the Wii selling less than in 2008 (ignoring the shortages and the december sales, yeah But we're talking about people with an agenda here and people with an agenda tend to really believe what they said has come true as soon as there's some kind of statistic to back their claims up). So I agree here, too. I just think this time the gaming media really thinks the Wii is doomed while in 2008 not even the biggest HD-believers could be stupid enough to believe this.

@ Alby: Granted, Malstrom isn't perfect. But I think he's doing a good job so far and I agree with him that currently it looks like Sony is in a bad position. But yeah, we'll see

"I just stated there was an increase (especially in Japan) which Malstrom doesn't aknowledge to exist."

He does. He's pointed out that the system was selling better when the price got to more reasonable levels and when hit software showed up (which he contrasted with the Wii drought last year), just not enough to win this generation.

Alright then. I was under the impression that he was acting like there was only a very minor increase in sales.

It would seem like it, but when he brings up that hit games sell systems, he has noted that the PS3 had a few in Japan, and that was a big factor in it leading the Wii for a while. Also, he acknowledges the PS3 has better sales with a reasonable price, just that it's too late to give the system a significant boost.

@UncleScrooge

If Nintendo, with their next home console, is really successful in moving upmarket, with (and this is an important part) Sony and/or MS not making the right counter moves, would we be looking at the likely scenario of the PS4 and/or XB720 (let´s just call them that) being their last systems in this industry?