The only reason some of you (including the OP) perceive the wii's business model to be better than that of the HD consoles is because it has sold more.
but wait? Has it?
non hd consoles: ~62 million hd consoles: ~66 million.
almost an even split.

The only reason the wii's business model is considered better is because it exists without competition.

IF next gen two consoles go simple and keep things basic with hw profitability from the get go, then that leaves 1 with the business model the 360/PS3 currently share.

THAT console will then win that generation.

I say lets get complex, lets have consoles do everything. (At least 1 of them should). And there is not any reason (going by current facts) that model will do any worse than the simplified alternative.

I could go on, but I am tired.

Look at the comic book industry.

It shows how the Sony/MS model leads to destruction.

When you rely and narrow in one fanbase with very specific needs... you end up alienating everyone else.

i am not saying they will not, i am saying they are not loyal. there fore they may actually buy microsoft if natal if successful or sony.

sony had them with ps2, with games like singstar. an they lost all their casual gamers.

Did Sony have them with the PS2?  The Wii seems to be selling to a lot more people then the PS2 was.

In addition, Singstar has actually held up pretty well sales wise. 

PS3 Singstar sold around .88 Million.  Not horrible considering how horrible Sony is managing that brand.

@Rol: I don't think GC was sold at a loss at any given time. There were R&D and prior to release distribution and manufacturing costs associated in the beginning, but that's not what's called "sold at loss".

Also, Sega has always been bad with financials. It's true that Playstation caused them to make a more expensive console, but what got them out of console business was their inventory of not sold consoles. By the time Dreamcast was discontinued, Sega had around 5 million Dreamcasts in their inventory. Since it was said DC cost 100$ to manufacture, they had half a billion worth of inventory with a revenue that didn't support the inventory that size. Basically all their money was put into the warehouse full of Dreamcasts (they should've burned it and get the money from insurance).

@KylieDog: You can speculate all you want, but what you're saying is, that the casual audience would be less predictable than non-casual audience. That i do agree to an extent, but when we are talking about generation change, i don't think we really can judge the future performance based on the predictability of the core audience. For example, Sony thought they could predict how the core audience behaves, and it got them close to being a non-factor in the console market from the prior market dominance.
Another good example of how you can't rely in the core audience, is Nintendos consoles sales between NES and Wii. After NES, up until Wii, Nintendo kept catering the core audience and that caused Nintendo to go nearly a non-factor in a market it once dominated.

Nintendo is tapping into three different markets with Wii; the core gamers, non-gamers and lapsed gamers. The split of casual and non-casual gamers in these groups is a different story that i'm not interested in speculating at the moment.

But the point is, that the people who won't be catered, won't stick around. If Sony and M$ takes the route Nintendo took this gen, they are facing the same problems. And also, if they can't expand outside what Nintendo did with Wii, they run into the same problem Nintendo did with Gamecube against PS2.

@Alephnull: I'm not sure are you serious or just trolling with the revenue, peripherals and the business model. Revenue is pretty much irrelevant measure in some things popularity. Especially when the talk is about profiting with products. The whole point is about selling stuff cheaper and still make bigger profit per unit sold.

In razor and blades model, the whole idea of selling at a loss is to have a price advantage over the competition. By selling the product at a higher price and still make losses is very badly done. If next gen, Nintendo sells their products with profit and competition is selling with a loss and higher price, they still face the same problem.

Revenue is not a measure of success. Some of companies such as GM have enormous revenue, but can still go bankrupt despite all the revenue.

@Rol: Ok, i don't have a reason to doubt HappySqurriel either, but does he mean "below manufacturing costs" or "below launch costs".
Just finding it odd, that it would've been sold at a loss at any given time without factoring the "launch costs". The financial reason why Nintendo wants to release its consoles prior to christmas, is because it pays quickly back the initial cost it takes to launch a console. Even if you would sell the console for a profit, the distribution, marketing and manufacturing the launch batch of consoles is going to hit the bottom line for the period in any case.

For example, if you manufacture million consoles as an initial batch of consoles and it costs 100€ per console to manufacture, but you make 100€ profit each console sold, you break even with the launch when the million consoles a sold, assuming another million is manufactured in the same period. Nintendos "pre-christmas" launch strategy, in the terms of the example, means they distribute million consoles at the same time they manufacture 500k consoles. With Gamecube, it was pretty easy to fuck up the strategy since it underperformed.

I thought Dreamcast was sold at a loss after it was discontinued and they started clearing the inventory.

You are right saying Nintendo was smart, focusing on casual gamers and "non gamers" to sell more units.  But don't forget that Wii is very very bad if you consider the graphics, physics, sound experience that PS3 and 360 are offering.  Wii can only dream games like Gears2, KZ2, Uncharted2, R&C: ACIT, Alan Wake, Mass Effect2, God of War3, GT5, The Last Guardian, Heavy rain, Splinter Cell C., etc.   These are the only true next generation games, and we have to say thank you to Sony and MS, which are still delivering real next gen games.  Thanks GOD Sony and MS are still thinking about their core audience and mind-blowing games, unlike Nintendo, who released an over-clocked Game-Cube with motion control.  If you ask me, I'm 100% disappointed by the Wii.  

Go Sony go, go MS go !   I really hope Wand and Natal will be something special, to capture the attention of more casual and non gamers, maintaining the beautiful, unique games with far superior graphics, physics, animations, stronger AI, more complex Gameplay than a "fake" Nintendo next gen console like Wii.

I agree completely, Rol.

I was responding to the "look at Nintendo's profits, the GameCube was surely profitable" posts, however, not the blatent Wii/DS profits.  As you say, there's no way to know that it lost money for Nintendo... or by the same measure, garnered a profit.

The Wii is based on selling to casual players, who want a few "killer apps" for it. WiiSports and WiiFit are these killer apps. When you plan on selling fewer titles, you need to make a profit on the system. What I believe the Wii had did was cause publishers to give consideration to who is buying a system, in deciding what system to develop for. Just because a system has a top install base doesn't mean you develop a game for it.