I agree. MS, and especially Sony, have gone about trying to take the Wii's market in the complete wrong way. MS is largely missing the point with Natal in that people want accessibility and pick up and play (though they "get it" more than Sony does). To me, Natal just seems to make things more cumbersome and complicated. It does not really appeal to a need (I doubt there is a market out there that wants to play games with their bodies rather than controllers). Also, they seem to be marketting Natal to the wrong people, trying to get the hardcore into Natal, which won't work either, becuase the hardcore want precision and ocmplex gameplay. I don't see how Natal controls could possibily offer this.

As for Sony, they are extremely short sighted in their quest to co-opt Nintendo disruption in that they think just tacing on a motion contorlled Wiimote rippoff will be enough to draw in the casuals. They don't get that it's not simply motion controls that draws in the expanded audience, it's the controls making the games more intuitive, accessible, and unique. It's the way the games are marketed, and providing a "job" the competitors can't offer. Sony is awfully primitive in their approach because they are still simply playing the technology game, while Nintendo realizes it's not the technology, but the PHILOSOPHIES behind the games that draws the attention.

Sony and MS are going about the wrong way to try and co-opt Nintendo's disruption, and especially with the Vitality Sensor coming out soon, they continue to be a step behind, bound by the restrictions of their business models of sustainability.

ok ummmmm yeah uhhhh what????????

What exactly was unclear in that?

@Avinash and Metallicube:
I don't and cannot expect from Sony and MS a fully working reaction to WiiMote and its philosophy, if only because they can't seamlessly glue completely new controls and gaming philosophies to consoles that were born completely different and "classic" and have now accumulated tens million HW and SW sales without these novelties. I expect more that for this gen they experiment with the new devices and dev tools, but a true complete and effective reaction will be possible next gen, including all the novelties in the standard equipment, possibly inventing something new or also, like I wrote, choosing a mix from the new and old things that they think could differentiate them from competitors and cater for audiences partially and not totally overlapping. This gen, necessary experiments apart, they'll do at most damage control, never tried to deny it, what I believe is that despite Nintendo being the undisputed leader, MS and Sony are reacting well enough to avoid disruption or delay it enough to be ready when next gen begins, nothing to write home about, but enough to prevent Nintendo from reaching 50%.
How well MS and Sony will do next gen, though, is a thing that we can't know now, but nothing is granted to the previous winner, and both Nintendo and Sony know it perfectly because they experimented it.
And in previous posts I didn't even mention XB360's tie ratio a lot higher than Sony's and Nintendo's, so that Wii SW % Let's not forget that failed invasion of Russia through the centuries show that slowing and getting in the mud fast intruders/disruptors is an effective tactic to stop them, despite it being completely different from counter-disruption.
And then there is another factor: de facto synergies, even unintentional: Nintendo and MS de facto effected a synergic action to dethronize Sony, but Sony and Nintendo did and are doing the same to prevent MS from conquering another monopoly and Sony and MS are doing another one to prevent Nintendo's disruption. With 3 strong players balance is a lot more complicated than oversimplified theories. Even without considering 3rd parties that furtherly complicate all.

No, trying to adopt a mix of values would kill them at both ends of the market, and lead them to utter debacle

No, see the problem is as I point out, you can't go half and half, the upmarket has totally different values than the down market and in order to appeal to one you have to basically shortchange the other, trying to go for both would leave them with a system that is appealing to neither.

Also next gen, Sony and MS will be even further behind the curve than this gem because Nintendo spent this gen building up the skills needed to appeal to the downmarket, Sony and MS have none of those skills, and it takes time to build them up, Nintendo will be able to further trap them in their shrinking box

This presumed impossibility is totally undemonstrated. Once the HW and dev tools are there, you can have dev teams working on new games and others working on classic ones. Flooding the market with Wii Sports rip-offs would give much worse effects than diversifying.

Uninspiredly copying Nintendo would be the worst mistake, finding some new value Nintendo didn't see would be perfect, instead, and as this possible new Holy Grail of gaming is still unknown, we cannot know what is it, yet, by definition. Thinking MS and Sony aren't working on filling the conceptual gap is naïve.

No one is saying for them to just copy Wii sports, but the issue is understanding the values of the downmarket, and the ability to produce games that appeal to those values.

Unfortunately for Sony and MS, they lack the processes and values as companies to do that.

Nintendo is a gaming company, not a technology company or computer company, and a company with a very strong first party, in fact building its hardware around the needs of its first party, this is a major reason for why nintendo has the processes and values needed, and why Sony and MS are unlikely to be able to compete

Nintendo's capabilities are undeniable and even a perfect Sony and MS reaction couldn't anymore, by now, deny its victory. But as tech and computer company Sony and MS could do a clever thing, ask users and most dynamic SW houses what is necessary for the next gen consoles, then study by themselves also some new appealing features and finally deliver HW and dev tools, for their own 1st parties and for 3rd parties.

Despite some haters, I never underestimate Nintendo, and actually Wii is the only current gen console I could buy, when its price drops enough and enough games I could like are released to meet my value for money threshold. But neither I underestimate Sony and MS, they are undeniably bloated and far too often they act clumsily, but they both have big resources and high ability to recover and put their errors right. And yes, they failed for arrogance, excess of confidence and lack of agility, so they needed a big lesson of humility. But firmly believing they refuse to learn would mean believing they crave for suicide, by no means a rational behaviour for a company. And to be lulled in a false sense of security by this belief would be a dangerous mistake for Nintendo, so actually Nintendo strongest fans, should they manage to achieve this persuading it its competitors are committing suicide and there's no need to fight, could put Nintendo at risk.

Next week the PS3 will be under 200k.