Now Nintendo Needs to Figure Out How to Respond.
The Wii put up a heck of a fight, first blowing away expectations at opening, and then continuing their sales juggernaut to this very day (contradicting the 'Wii sales will die any day now argument).
Sony and Microsoft Fight Back
A big part of the reason "Wii" were able to have such a large advantage over the other consoles, despite inferior gfx abilities, was the price range. The PS3's recent price cut is likely to boost the PS3, but it isn't likely to dent Wii sales. Now the xbox 360 is expected to get cuts, with the core unit falling all the way to 250$; an answer to the PS price cut, and one that can have a big effect on Wii sales (eventually). With the Wii's promised hardcore support still floundering (and with no announcement in sight to fill the online vs FPS hole in the lineup), hardcore gamers are going to be hard-pressed choose it over an xbox. Also, once buyers consider the cost-spreading of owning a now-cheaper 360 (online fees and hardware addons), they may even consider a PS3 as an alternative. This is more than a shot across the bow to Nintendo.
Sales numbers haven't really had a reason to change until now (now being when price cuts actually take effect). Sony and MS and their respective fanboys all thought the Wii was a passing fad, that they wouldn't need to respond. They still haven't come up with an answer to the control system, and likely can't (they're aren't going to give up standard controls, and having an alternate control system won't be effective and could be confusing--likely developers would ignore it and it would have no impact), but now they are finally addressing the Wii as a potent threat.
Anyone who believes nothing can stop Nintendo is deluded. Doing nothing, as MS and Sony have proved over the past 9 months, will indeed change nothing. However answering the price discrepancy promises to have a big impact over time. Having closed the gap considerably while still offering far more features compared to the Wii, the arguments for the xbox and the PS3 have never been stronger. They've always been subsidizing impressive hardware, but now they're pushing it into a difficult-to-resist 'zone'. Nintendo is simultaneously showing signs of taking all their hard-earned success for granted--going on vacation. Their desire to still please the hardcore gamer gets mentioned now and again, but it's not showing up in the lineup, or even in announcements of future lineups. Their desire to deliver any online experience gets talked about, but the actual commitment is tiny. Pokeman, Soccer, SSBB. However good their reasons for cutting 3rd parties out of online this year, the choice has consequences: a weaker lineup. A lot of talk, not much action.
Personally, I have no desire to return to button mashing, and current price cuts have no impact on what I'll be playing--I've already made my purchase. I'm not financially equipped to own 2 consoles, and likely wouldn't even if I could. But Nintendo isn't delivering the hardcore goods (yet). Although I don't Want to go back to the dual-analog way of life, I do WANT to actually use my snazzy now-gen controller for now-gen games. Nintendo's decisions will effect what ultimately gets dev'd for my Wii, and whether it will get resold or not. You want me to be patient Nintendo? Give me a date: when do you really enter the 7th generation? Sony and MS waited almost a year to respond to the Wii threat. Nintendo needs to be quicker on its feet with a counter-move.
The New Breakdown
They are focusing heavily on casual gamers, despite protestations to the contrary, and leaving people like myself with little to do. They are leaving potential new buyers with an ever more slanted feature and lineup disparity, begging them to end Nintendo's money-printing days. Basically, it breaks down like this:
Wii: great controller, mini-games galore, traditional N franchises
Xbox: better gfx, last-gen button mashing, now-gen online, mature hardcore lineup, cost-spreading (through add-ons and fees)
PS3: even better gfx, now-gen online, last gen button mashing with optional ineffective sixaxis, full price upfront (everything you need in one package, no fees)
The sole remaining selling point is the controller--it's a strong selling point, but less so unless you've experienced how great it can be. Right now, there's little to demo that greatness. MP3C will be able to demonstrate how powerful the controller can be, but while doing so will simultaneously remind any hardcore gamer just how feature-poor the system is. I have this powerful control system, I just can't use it against real people.
Will Nintendo Respond?
No, I'm not suggesting that today is the day Nintendo died. I'm suggesting that these price cuts represent a real threat to Nintendo's juggernaut sales. What they need to realize is that they must answer this challenge. The easy way, especially since they are the only console making a profit on hardware, is to answer with a price cut. The more likely way, given Nintendo's history, is to answer with a console revision: colors, extra media features, maybe even additional storage space. What they should do is close the lineup and feature gap by encouraging online support from third parties, finding a new or existing IP to fill the hardcore lineup gap (if they need to partner with 3rd party to make it happen, if they need to make heavy investment and take on most of the risk, then that's what they should do) with something in the AAA category (once it has proven the Wii has the audience, 3rd parties will line up to provide additional content of the same type).
I got sick of hearing how MP3C couldn't have incorporated online vs play (as opposed to how it shouldn't have the features) because it would make the single player mode suck, or because Retro has limited resources, or because of deadlines. It's all malarkey. For every such technical problem there is a viable technical solution. If it means additional hiring, or farming out parts of projects to 3rd parties, or partnering with 3rd parties--there is a way to make it happen. If Nintendo chooses to let their lineup continue to languish in late 5th gen, it is a choice, not a necessity. They are rolling in dough, in 3rd party support, in hype, in media love and attention, and all evidence to date says they aren't willing to leverage this to meet the hardcore gamer's desires on any near timeframe. Until I see evidence to contrary, it appears Nintendo is on vacation--reaping the harvest of their past year's labor.
If you're nearing the 7th gen console market, and you like the Wii, you might want to wait until Nintendo returns from vacation. I don't think there's any company better suited to deliver a casual gaming experience--and they're on top of that. That alone can make them bags of money. I don't think there's any console with more potential to change hardcore gaming for the better--but Nintendo seems only vaguely interested in exploiting that potential. If you care about the latter, you might want to wait until they get serious about it with a little less talk and a lot more action.